[Urgent Unsold Housing Diagnosis] ③ Even 'Brand Apartments' Don't Work

Hillsstate, ePyeonhansesang, and Xi Also Struggle
One Major Construction Company's Unsold Units Near 10,000

[Asia Economy Reporter Wan-yong Cha] ‘0.06 to 1 and 0.3 to 1.’ These are the subscription competition rates for brand apartments (including residential officetels) offered by major construction companies in January and February this year. Even brand apartments struggled due to the housing market downturn. There are also reports that one major construction company, which had a large supply of units last year, is nearing 10,000 unsold units.

A bird's-eye view of 'Hillstate Dongdaegu Central' in Dong-gu, Daegu, under Hyundai Engineering & Construction's Hillstate brand. The subscription competition rate for this complex remained at 0.06 to 1 (478 units available, 28 applicants). [Photo by Hyundai Engineering & Construction]

According to the Korea Real Estate Board's subscription homepage on the 14th, out of 11 apartments that received first-priority subscriptions this year, 8 failed to meet subscription targets. Among them were complexes bearing major construction company brands. These include Hyundai Engineering & Construction’s ‘Hillstate Dongdaegu Central’ in Dong-gu, Daegu, and DL E&C and Kolon Global’s ‘Pyeongchon Centum First’ in Anyang, Gyeonggi Province. Their subscription competition rates were 0.06 to 1 (478 units offered, 28 applications) and 0.30 to 1 (1,150 units offered, 350 applications), respectively.

‘Manchon Xi Re Ne’ in Suseong-gu, Daegu, branded by GS Engineering & Construction’s Xi brand, was also offered in April last year but experienced a large number of unsold units. Out of 607 units offered, about 480 remain unsold. This complex is a post-sale complex that began move-ins in January. It is a severe unsold complex after completion. In Pyeongtaek, Gyeonggi Province, DL Construction’s ‘Pyeongtaek e-Pyeonhansesang Laciello,’ offered in August last year, currently has over 300 unsold units.

Daewoo Suseong-gu Manchon Jaileune, branded with GS Construction's Xi brand, experienced conflicts with buyers after unsold units occurred, leading to the apartment model displayed in the model house being damaged.
[Photo source: Online community]

Unsold brand apartments have also appeared in key areas such as Seoul and Busan. These include ‘The Sharp Park Soleil Yu’ in Gangdong-gu, Seoul, ‘Mapo The Classy’ in Mapo-gu, Seoul, and ‘Namcheon Xi’ in Suyeong-gu, Busan. Although these complexes performed well in subscription closings, winners have given up their contracts, leading to open subscriptions without priority. Known as ‘Jupjup’ (picking up), these are effectively potential unsold units.

These are not the only unsold brand complexes. Several others failed after being offered last year. Industry insiders say that among major construction companies, Hyundai Engineering & Construction, GS Engineering & Construction, and DL E&C, which had large supply volumes last year, have many unsold units. A representative from a major construction company said, "Among major construction companies, Hyundai Engineering & Construction, GS Engineering & Construction, and DL E&C have accumulated some unsold units," adding, "In particular, there are rumors that one construction company is nearing 10,000 unsold units."

However, it is difficult to compile accurate statistics. Construction companies tend to conceal unsold units when they occur. Even looking at Ministry of Land, Infrastructure and Transport statistics, only unsold units by local governments are aggregated, making it hard to find unsold units by construction company.

Of course, it is not easy for construction companies to tally unsold units either. They receive unsold statistics directly from project sites and sum them up, but since the number of unsold units changes daily, producing accurate statistics is practically impossible.

An executive in charge of housing business at a construction company, who requested anonymity, said, "The sales market is so difficult that unsold units occur even in brand-name, large-scale apartments," adding, "However, since most projects are construction projects, the occurrence of unsold units does not pose significant management difficulties." He continued, "Because accumulated unsold units negatively affect the brand, we plan projects as conservatively as possible to prevent accumulation of unsold units."