- Rising Trend in Variable Interest Rates on Mortgage Loans, Local Apartment Sale Prices Also Up 9.25% in One Year
- Increased Housing Burden Leads to Various Financial Benefits and Windfall Gains in Pre-Sold Complexes with Fixed Sale Prices
Pre-sale complexes offering various financial benefits, including interest-free installment payments, are gaining popularity among buyers. This is because the burden of rising interest rates, which have been continuously increasing, is significantly reduced, and since the sale price is fixed, homeownership is possible regardless of the upward trend in sale prices.
The Bank of Korea raised the base interest rate from 3% to 3.25% by 0.25% at the Monetary Policy Committee meeting held on the 24th. This marks the first-ever six consecutive rate hikes (April, May, July, August, October, November). Considering that the base rate was 0.5% in August last year, it has increased by 2.75 percentage points in just one year and three months. As of the third week of November, the upper limit of variable mortgage loan interest rates at the four major commercial banks reached 7.8%, and the entry into the 8% range within the year is imminent.
In particular, the continuous rise in construction raw material prices and labor costs has caused the sale prices of private apartments to show an upward trend, becoming a heavy burden for homebuyers. According to the Housing & Urban Guarantee Corporation (HUG), as of the end of October, the average sale price per square meter nationwide was 45.62 million KRW. This is a 9.17% increase compared to the end of October 2021 (41.79 million KRW) and a 1.28% rise compared to just one month earlier in September (45.05 million KRW).
Industry experts explain, “The rapid rise in interest rates and sale prices is significantly increasing the burden on housing demanders. As a result, phrases like ‘today is the cheapest sale price’ are emerging, and among homebuyers, pre-sale complexes with fixed sale prices are gaining popularity. Interest is growing in complexes that offer financial benefits, allowing buyers to gain great utility with less burden.”
‘Geoje Hanshin The Hue,’ the first ‘Hanshin The Hue’ brand complex introduced by Hanshin Engineering & Construction in Geoje City, Gyeongnam Province, is a complex where small investments are possible without worrying about rising interest rates and sale prices. It offers various benefits such as a first payment of 10 million KRW, a fixed 5% contract payment (with the remaining 5% as an interest-free loan), full interest-free installment payments, and free air conditioners (2 units) for some units on a first-come, first-served basis. With only a 10 million KRW contract payment, there are no additional burdens until move-in, attracting interest from both actual buyers and investors.
Notably, the complex allows unlimited resale without resale restrictions, and the ‘Contract Condition Assurance System’ applies, which retroactively applies contract conditions to pre-sale buyers even if contract terms change in the future, drawing attention.
A sales representative said, “As the burden of homeownership increases significantly, inquiries from buyers are focusing on financial benefits that drastically reduce their burden until move-in, such as the fixed 5% contract payment and interest-free installment payments. Especially, investment demand is high due to the advantage of unlimited resale.”
Meanwhile, ‘Geoje Hanshin The Hue,’ located in the Ajoo-dong area of Geoje City, Gyeongnam Province, will be developed as a complex with 6 buildings ranging from 2 basement floors to 25 above-ground floors, totaling 547 apartments with exclusive areas of 84 and 99 square meters. By exclusive area, it consists mainly of popular medium-to-large types: △84㎡A 157 units △84㎡B 122 units △84㎡C 123 units △99㎡A 72 units △99㎡B 73 units.
The complex boasts a convenient one-stop location for daily life. Within a 1.5 km radius, there are many commercial centers and convenience facilities such as marts, banks, hospitals, and academies, providing excellent living conditions.
Moreover, Naegok Elementary School is located right in front of the complex, and Daewoo Elementary School, the only private elementary school in Geoje City, as well as the prestigious Geoje Middle and High Schools, are nearby. Additionally, premium educational services will be provided within the complex through the nationally recognized education brand Jongno M School (offering a 50% tuition discount for 2 years), making it a leading education-specialized complex in the region.
The transportation network is also noteworthy. Through the nearby Songjeong IC, wide-area travel to Busan, Changwon, Gimhae, and Tongyeong is convenient, and within Geoje City, the Ajoo Tunnel, Geoje-daero, and National Route 14 allow quick access to local living areas. Furthermore, the newly established Ajoo-dong bypass road, which allows quick exit before entering the Ajoo Tunnel on National Route 14, is expected to further improve transportation conditions.
Excellent proximity to workplaces is another strength. The Okpo National Industrial Complex, where Daewoo Shipbuilding & Marine Engineering’s Okpo Shipyard is located (with over 30,000 employees), is about a 5-minute drive away. Also, the Jukdo National Industrial Complex, where Samsung Heavy Industries’ Geoje Shipyard is located (with over 30,000 employees), is reachable within about 10 minutes by car.
Additionally, the area is attracting attention as a major beneficiary of Hanwha Group’s acquisition of Daewoo Shipbuilding & Marine Engineering, which enhances its future value. After drifting ownerless for over 20 years, Daewoo Shipbuilding & Marine Engineering is expected to gain momentum with a strong parent company ranked 7th in the business world. As the core hinterland of Daewoo Shipbuilding & Marine Engineering’s Okpo Shipyard and the location of Geoje Hanshin The Hue in Ajoo-dong, the area is receiving significant industry interest due to high expectations for future value.
In particular, several mammoth-scale development projects are underway in the Geoje area, including the ‘Southern Inland Railway’ construction project connecting Geoje City and Gimcheon City, Gyeongbuk Province by high-speed rail, which will reduce travel time from Geoje to Seoul to about 2 hours and 50 minutes upon completion; the Gadeokdo Southeast New Airport connected to Geoje via the Geoga Bridge; and the Geoje-Tongyeong Expressway connecting Tongyeong to Geoje. These projects are attracting attention from a wide range of demand, including metropolitan demand.
Geoje Hanshin The Hue is currently operating a model house.
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