"Incheon Subscription Cold Wave is Fierce"... All 7 Recently Launched Properties 'Undersubscribed'

Housing Prices Plunge, Atmosphere Completely Changed in First Half
"Blindly Applying for Cheongyak May Lead to Unexpected Wins... Be Cautious Even with Second Priority Applications"

[Asia Economy Reporter Kim Hyemin] As the nationwide subscription market stagnates, the metropolitan area is also experiencing a cold wave, with the subscription atmosphere in the Incheon area in particular showing unusual signs. As housing prices rapidly decline, the number of people seeking subscriptions has also quickly decreased. Unsold units are increasing rapidly, indicating that the real estate market is taking a direct hit.

According to the Korea Real Estate Board's Subscription Home on the 23rd, all seven apartment complexes that were supplied in the Incheon area over the past two months failed to meet their recruitment targets. For the seven complexes, a total of 2,616 households were recruited, but only 1,178 applied, resulting in an overall application rate of just 45%. This includes first-priority applicants from the relevant area as well as second-priority applicants from other areas.

Looking at the results for each individual complex, the situation is even more dire. 'Yeongjong Ocean Park Moaelga Grande,' which opened for subscription on the 19th, recruited 558 households but only 86 people applied. This means that 472 households, accounting for 85% of the total, remain unsold. On the same day, 'Hillstate Incheon City Hall Station' in Namdong-gu also fell short, with only 270 applicants for 400 recruited households. Notably, this complex is located in a double station area near Seokbawi Market Station on Incheon Line 2 and Incheon City Hall Station on Lines 1 and 2, and benefits from the transportation advantage of the metropolitan express railway (GTX)-B line passing through, yet it still failed to meet its subscription target.

Until July this year, the Incheon area had no difficulty achieving full sales, but starting from mid-August, places began to fall short, and recently, it has repeatedly failed to fill even half of the recruitment quota. This is because housing prices in the Incheon area are declining rapidly compared to other metropolitan areas. According to statistics from the Korea Real Estate Board, apartment sale prices in Incheon fell by 1% from January to July this year, but plummeted by 7.55% from August to November. Since the sale prices were set higher than the surrounding market prices, the subscription market also fell into a simultaneous slump.

Some analysts suggest that as the subscription market stagnates, there is an intentional inducement of subscription shortfalls to avoid no-priority subscriptions. If the subscription competition rate does not exceed 1 to 1, the property can immediately proceed to discretionary sales (first-come, first-served or designated unit sales), and it is said that this point was exploited by not actively promoting or marketing. From the perspective of the seller, discretionary sales, which allow voluntary allocation, may be more convenient than repeatedly conducting regulated no-priority subscriptions.

As a result, unsold units are rapidly increasing. According to the Ministry of Land, Infrastructure and Transport, the number of unsold units in the Incheon area jumped from 544 households in July to 1,222 in August, and increased to 1,666 households as of October. A representative from the sales industry said, "Looking at the recent subscription atmosphere, many applications come from second-priority applicants from other areas, but if you recklessly apply, you may unexpectedly win and lose your subscription savings, so caution is necessary." He added, "If shortfalls continue, benefits such as price discounts, free options, and loan support may increase, so it is important to carefully observe the atmosphere."