- Apartments once criticized for high prices now selling out consecutively as if nothing happened
- 'Jeongeup Prugio The First' attracting the highest number of subscriptions in Jeongeup history, contracts upcoming
An apartment recently embroiled in controversy over high pre-sale prices has successfully completed its sales. Contrary to market crisis theories, analysis shows that more people than expected view the current moment as a 'buying opportunity' regardless of the region.
Experts are also increasingly forecasting that "the real estate market, which momentarily froze due to high interest rates, has now fully entered a thawing phase." Accordingly, the phenomenon of demanders, armed with the judgment and conviction that current pre-sale prices are the cheapest and that housing prices will eventually rise, flocking to the pre-sale market is expected to become more pronounced.
They said prices were high at the beginning of the year... but now they seem cheap
According to the real estate industry, Seoul's largest reconstruction complex, 'Olympic Park Foret On (Dunchon Jugong Reconstruction)', was 'sold out' on the 22nd. It was an apartment eagerly awaited by all Seoul residents last year, but it suffered the humiliation of undersubscription up to the second priority due to interest rate hikes and debates over the real estate peak. However, most customers who applied for subscription signed contracts, and over 40,000 people gathered for the remaining units' non-priority subscription, completing contracts in a short period.
An industry insider said, "The effect of the 1.3 measures also worked, but even before that, there was talk in the sales industry that it would be sold out before the cherry blossoms bloomed," adding, "This is because many people believe that the price will never come out at that level again and that housing prices will inevitably rise."
'Mapo The Classy', which was released post-sale and was labeled with high pre-sale prices, also completed 100% contracts around the same time. The head of a nearby real estate agency said, "At the time of the sale in December last year, the pre-sale price of 1.3 to 1.4 billion KRW was considered expensive, but now the public opinion is that the price is reasonable," adding, "The market atmosphere has changed since the beginning of the year, and a genuine uptrend is blowing."
Prior to this, 'Gangdong Heritage Xi' and 'Jangwi Xi Radiant' both completed 100% contracts, and SK Ecoplant and Lotte Construction's 'Riversen SK VIEW Lotte Castle' also finished contracts for all units. Large complexes in Gwangmyeong, Gyeonggi Province, and Dongtan 2 New Town also found owners this year.
Transaction volumes are also increasing. According to the Seoul Real Estate Information Plaza, last month, apartment transactions in Seoul reached 2,348 cases, surpassing 2,000 for the first time in 1 year and 4 months since October 2021 (2,198 cases). Since the reporting deadline is about a week away, the final transaction volume is expected to exceed 2,500 cases.
Warmth also spreading to local real estate
The warmth originating from the metropolitan area is expected to spread to local regions. Real estate has shown a trend where Seoul and Gyeonggi/Incheon rise first, followed by local areas. However, since local demand is thinner than in the metropolitan area, 'sorting the wheat from the chaff' is expected to proceed, focusing on verified sites such as complexes constructed by famous brand construction companies.
According to the real estate industry, except for Daegu (one complex), where the market has been in long-term stagnation this year, only three apartments constructed by top 10 construction companies have been sold in local areas, and all are performing well.
First, in Changwon, Gyeongnam, 'Changwon Lotte Castle Forest' with 1,965 households found all owners in a short period in March, becoming a hot topic, and in Cheongju, Chungbuk, 'Bokdae Xi The Sky' recorded an average of 18.7 to 1 in the non-priority subscription results in March.
Jeongeup, Jeonbuk, is also attracting attention as the region's first top-tier brand apartment, 'Jeongeup Prugio The First (707 households)', is about to hold winner contracts. The subscription results broke the record for the highest number of applications in the region's history, and visitors to the model house have been continuous. A fixed deposit system of 5 million KRW for the first payment is implemented, and unlimited resale is possible.
A sales official said, "Jeongeup has only had about 500 households sold over five years, and there has been a lack of apartments that meet the expectations of local residents, so many customers have been waiting for Jeongeup Prugio The First," adding, "Especially after the subscription ended, there is high interest from other regions that did not qualify for subscription, and considering the current market atmosphere, customers who applied are mainly end-users, so the formal contracts are expected to proceed smoothly."
Consumer sentiment index recovers and pre-sale right transactions increase
Sentiment is also recovering. According to the February real estate market consumer sentiment survey released by the Korea Research Institute for Human Settlements' Real Estate Market Research Center, the nationwide housing market consumer sentiment index recorded 102.1 last month, rising 10.6 points (P) from 91.5 the previous month. The index rose above 100 again for the first time in seven months since July last year (95.2).
Pre-sale right transactions also seem to be reviving. According to data on housing transactions by cause from the Korea Real Estate Agency, nationwide apartment pre-sale right transactions in January were 3,417 cases, an increase of 480 cases compared to the previous month. This marks three consecutive months of increase since November last year.
In the past, slight recessions were overcome and prices rose sharply
Experts say, "This atmosphere is a repeated pattern that has always existed in the past." They explain that the real estate market often shows strong crisis theories but suddenly reverses and rises sharply.
In fact, according to KB Real Estate, since statistics were first published in 1987, nationwide apartment prices have fallen only eight times. Except for the 1998 foreign exchange crisis, all declines were slight, less than 5% compared to the previous year. On the other hand, price increases have been steep, with prices rising more than 10% seven times.
Prices are already showing signs of rebounding. According to the Korea Real Estate Agency, the nationwide apartment price decline has been narrowing for four consecutive weeks since the sixth week of February.
A developer official said, "Except for places like Daegu, where there is a large supply without brand power, most regions will continue to see a price reversal in the first half of the year," adding, "Also, the recent subscription trend shows ordinary competition rates but high contract rates, making it difficult to judge the market simply by competition rates."
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