1st floor of the model house for Dunchon Jugong Apartment (Olympic Park Foreon) in Dunchon-dong, Gangdong-gu, Seoul. Visitors are viewing the scale model of the complex / Photo by Hwang Seoyul chestnut@
[Asia Economy Reporter Cha Wanyong] A severe cold wave is sweeping through the real estate subscription market. Even in the Seoul subscription market, once considered invincible, unsold units are appearing, and in the provinces, apartment complexes with zero applicants have emerged.
According to Korea Real Estate Board's Subscription Home on the 16th, 'Villadarte Jeju' being built in Topyeong-dong, Seogwipo-si, Jeju Island, received no first-priority subscription applications on the 12th. Although 36 units ranging from 168 to 242㎡ were supplied and second-priority applications were accepted, only 2 applications were received: one for 168㎡ and one for 170㎡.
Earlier, 'Hampyeong Ellice Signature' supplied in Hampyeong-gun, Jeollanam-do, also had no subscription applications in the first-priority round this month. This complex supplies 232 units of 84㎡, and only 3 applications were received in the second-priority subscription.
The situation is equally difficult in the metropolitan area subscription market. ‘Paju Unjeong A2 Block Hoban Summit,’ which launched sales on the 5th, conducted subscriptions up to the second priority for 1,031 units but only 269 people applied, leaving 762 units unsold.
Even major large-scale complexes in prime Seoul locations, such as Dunchon Jugong (Olympic Park Foreon) in Gangdong-gu and Jangwi 4 District (Jangwi Xi Radiant) in Seongbuk-gu, are failing to attract subscription success.
Olympic Park Foreon recorded an average competition rate of 5.45 to 1 with 20,153 applicants for 3,695 units in the first and second priority rounds (local and other regions), but this fell short of expectations. Particularly, due to factors like the inability to get mid-term loans for 84㎡ units, there is concern about unsold units.
In Seoul’s Seongbuk-gu, the 'Jangwi Xi Radiant' subscription for 956 units in the first and second priority rounds attracted 4,479 applicants. The average competition rate was 4.68 to 1, but 9 out of 16 unit types failed to close within the priority rounds. These unsold types are likely to proceed to non-priority subscriptions.
Until last year, it was natural for major Seoul locations to close in the first priority round, but with the cold wind blowing, the phrase 'Seoul invincible' has become a thing of the past.
In Seoul, unsold units after completion are increasing, especially in high-priced apartments. Unsold units after completion refer to complexes that remain unsold even after move-in has started and are also called 'malignant unsold units.' The number of unsold units after completion in Seoul rose by 12.3% (23 units) from the previous month to 210 units.
The main reason for the nationwide increase in unsold housing is the decline in housing demand due to concerns over falling house prices, which has also significantly reduced transactions. According to the Ministry of Land, Infrastructure and Transport, the number of housing sales nationwide until October this year was 449,967, a 49.7% decrease compared to the same period last year (894,238).
By region, the metropolitan area recorded 179,159 transactions, down 58.5% year-on-year, and the provinces (270,808) also decreased by 41.5%. During the same period, Seoul’s housing transactions were only 50,611, down 55.1% from the previous year. In particular, Seoul’s apartment transactions in November totaled 491, setting a new monthly low since August.
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