'Nearby Helio is 1.5 billion won'... Dunchon Jugong Contract Holders Face Immediate Frustration

Olympic Park Foreon Contracts Begin January 3 Next Year
Experts Say "Future Value and Financing Conditions Must Be Considered"

The reconstruction site of Dunchon Jugong Apartment in Gangdong-gu, Seoul./Photo by Hyunmin Kim kimhyun81@

[Asia Economy Reporter Onyu Lim] "They say house prices will keep falling, but we can't just give up. Isn't it like wasting the savings in our subscription savings accounts?"

As the contract for the 'reconstruction giant' Olympic Park Foret on Seoul's Gangdong-gu, also known as Dunchon Jugong, is about to begin early in the new year, successful applicants are deeply troubled. Due to the real estate market slump caused by high interest rates, prices in nearby premium areas like Jamsil have dropped, causing conflicts over whether to subscribe or purchase. Since failing to contract results in restrictions on reapplication and the market sentiment could reverse in the future, debates continue in real estate communities.

Harsh Conditions in the Subscription Market... What is the Contract Rate for the 'Largest Reconstruction Since Dangun' Olympic Park Foret?

According to the real estate industry on the 30th, Olympic Park Foret will start official contracts on January 3rd next year. With the subscription market facing harsh conditions due to the economic downturn, the contract rate has become a hot topic in the industry. Real estate communities are filled with posts from successful applicants asking whether to proceed with contracts, and inquiries are also increasing at nearby real estate agencies.

Olympic Park Foret was once predicted to become a gathering place for perfect-score subscription accounts during the rapid house price surge period, known as the 'largest reconstruction since Dangun' with a total of 12,032 households. This is because it is a large complex of 12,032 households near Olympic Park, with double subway access to Seoul Subway Lines 5 and 9, and good school districts. However, as the real estate market declined, even a score of 20 points was enough to win, indicating a failure in subscription popularity. Concerns have arisen that the contract rate may be low. A sales official said, "As the subscription market is reorganized around actual demand, the competition rate was lower than expected, and with falling house prices, expectations for capital gains have decreased, leading to cases where people give up contracts even after winning."

Seongpa-gu, Seoul, Helio City Panorama

News of Price Drops in Premium Areas... Subscribe or Buy?

What particularly troubles successful applicants is the news of falling house prices in adjacent areas. As asking prices for apartments in premium areas like Jamsil have plummeted, the gap with the subscription price of Olympic Park Foret, which is around 1.2 to 1.3 billion KRW (84㎡ exclusive area), has significantly narrowed. In fact, listings in the 1.5 billion KRW range appeared in Helio City, Garak-dong, Songpa-gu, Seoul, shaking the market. Helio City is classified as a premium complex because it is close to Gangnam-gu across the Tancheon stream, making it a higher-grade area than Olympic Park Foret.

A nearby real estate agency official said, "When a 1.54 billion KRW listing appeared, inquiries surged, raising asking prices by 50 million KRW, but it still remains in the 1.5 billion KRW range, and similar or lower-priced listings may appear in the future." The fact that Seoul is a speculative overheated district, subject to an 8-year resale restriction and a 2-year mandatory residence period, is also a concern for successful applicants.

However, they cannot easily give up on subscribing to a large apartment complex in a good location. There is a possibility that Gangdong-gu will be removed from the speculative overheated district designation in January next year, and if the interest rate hike rally ends, the real estate market sentiment could reverse.

Experts advise making decisions based on future value and financing issues rather than being swept up by the current mood. Kim Deok-rye, Senior Researcher at the Korea Research Institute for Human Settlements, said, "The current decline in house prices due to macroeconomic changes may be temporary," adding, "Seoul's housing supply rate is still low, so the future value of large apartment complexes in good locations is guaranteed." However, she explained, "Since the burden of principal and interest repayment has increased due to high interest rates, it is necessary to review financing conditions before making a decision."