3 Out of 11 January Subscription Complexes Exceeded 1:1 Ratio
Some Small Complexes Had Only One Applicant
Financial Benefits Promoted to Resolve Unsold Units
[Asia Economy Reporter Lim On-yu] As the real estate market slump continues, a wave of unsold units has swept the subscription market. With many complexes failing to exceed an average competition rate of 1:1, some are striving to overcome the unsold crisis by offering drastic benefits such as discounted sales and interest-free interim payments.
According to the Korea Real Estate Board's Subscription Home on the 29th, among the 11 complexes that held subscriptions this month, only three exceeded an average competition rate of 1:1. Based on first-priority subscriptions, 'Seosan Haemi IAEdu Town' in Haemi-myeon, Seosan, Chungnam, had only one applicant for 80 general supply units. 'Incheon Seokjeong Hanshin The Hue' in Sungui-dong, Michuhol-gu, Incheon, received 17 applications for 139 units, and 'Songdo Station Gyeongnam Honorsville' in Yeonsu-gu, Incheon, had only 20 subscription accounts for 94 units, recording a competition rate of 0.21:1.
The atmosphere is no different even for large complexes that had shown strength in the subscription market. 'Pyeongchon Centum First' in Hogye-dong, Anyang-si, Gyeonggi, had 257 applicants for 1,150 units, resulting in a competition rate of 0.22:1. 'Iksan Busong Desiang Private Participation Public Sale Housing' in Iksan, Jeonbuk, which offered 727 units, attracted only 120 applicants, showing a competition rate of 0.17:1. 'Hillstate Dongdaegu Central' in Dong-gu, Daegu, constructed by Hyundai Engineering & Construction, had only 10 applicants for 478 units.
However, some complexes with high demand and price competitiveness still showed high competition rates. Two blocks, 1 and 2, of 'Changwon Lotte Castle Forest' attracted about 13,000 applicants for 461 and 491 units respectively, closing first-priority subscriptions with a competition rate of 28:1. Changwon has steady housing demand due to abundant jobs, and the relatively lower sale prices compared to nearby complexes and the scarcity of newly built large complexes seem to have contributed to this.
As loan interest burdens increase due to high interest rates, the subscription market cold wave is expected to continue for the time being. In particular, with the government lifting regulatory zones in all areas except four districts in Seoul (Gangnam, Seocho, Songpa, Yongsan), the competitiveness of local and metropolitan areas placed on the same non-regulated level as the 21 districts of Seoul may decline.
Kim Woong-sik, a research fellow at Real Today Research Institute, said, "In the metropolitan area, various regulations have been lifted due to the 1.3 measures, so if the sale prices are reasonable, it is expected to attract many subscribers," adding, "In local areas, many places already had no resale restrictions, so there is little change from this measure, making it difficult to see an increase compared to last year."
Given this situation, some complexes are making efforts to resolve unsold units through financial support and other means.
Especially in Daegu, where long-term unsold complexes have been accumulating since last year due to oversupply, complexes offering 'discounted sales' are increasing. 'Duryu Star Hills' in Naedang-dong, Seo-gu, Daegu, which had only 64 applicants for 195 units in October last year, is now offering discounted sales. This complex provides a 10% discount on the original sale price, full interest-free support for interim payments, and a congratulatory gift of 4 million KRW and an air purifier for the first-come, first-served contract holders. 'Siji Raon Private' in Suseong-gu, Daegu, is also promoting benefits worth about 85 million KRW, including a move-in support fund of 70 million KRW, interest-free interim payments, and free installation of four system air conditioners.
Other complexes such as 'e-Pyeonhansesang Heyri' in Paju-si, 'Eumseong Xi Central City' in Eumseong-gun, Chungbuk, and 'Geoje Hanshin The Hue' in Geoje-si, Gyeongnam, also offer full interest-free support for interim payments.
Seoul is no exception. 'Cheonwang Station Moa Elga Treview' in Oryu-dong, Guro-gu, Seoul, which has unsold units due to higher sale prices than nearby complexes, offers 30 million KRW cash support, interest-free interim payments, free balcony expansion, interest-free loans up to 50 million KRW for down payments, and refunds the deposit even if the contract is canceled before moving in.
Experts express concerns that unsold units will increase in the future and predict that the situation for small and medium-sized construction companies will become more difficult. Yoon Ji-hae, senior researcher at Real Estate R114, said, "Consumers will increasingly choose only complexes with clear advantages over existing ones as well as competitive sale prices," adding, "Large construction companies have the financial capacity to endure unsold units until move-in, but small and medium-sized companies are less likely to have such capacity."
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