Demand Concentrates in Seoul Due to Deregulation
Gyeongnam Sees Subscription Pass Rush for Changwon's Last Major Brand Complex
Despite the slump in the pre-sale market due to interest rate hikes, tens of thousands of subscription accounts are pouring into Seoul and Gyeongsangnam-do. Notably, these regions are the only ones nationwide where pre-sale properties this year recorded double-digit competition rates in first-priority subscriptions.
According to an analysis by real estate research firm Realtoday of data from the Korea Real Estate Board's Subscription Home as of April 12 this year, 16,603 apartment units (general supply) were offered across 14 cities and provinces, with a total of 98,860 subscription accounts used for first-priority applications, resulting in an average competition rate of 5.95 to 1.
Among these, the subscription performance in Seoul and Gyeongsangnam-do stands out. In Seoul, 37,025 subscription accounts flooded for 722 units, recording an average competition rate of 54.05 to 1, while Gyeongsangnam-do saw 26,995 subscription accounts for 998 units, achieving an average of 27.05 to 1, both showing high double-digit competition rates.
In contrast, the remaining 12 cities and provinces all recorded single-digit or below-par rates: Gwangju 6.32 to 1, Chungbuk 4.27 to 1, Busan 3.34 to 1, Gyeonggi-do 1.98 to 1, Incheon 1.05 to 1, Jeonbuk 0.56 to 1, Chungnam 0.48 to 1, Jeju 0.12 to 1, Jeonnam 0.04 to 1, Ulsan 0.03 to 1, Daegu 0.02 to 1, and in Gyeongbuk, not a single subscription account was used for first-priority applications this year.
The reason Seoul recorded the highest subscription competition rate appears to be due to the supply of branded apartments in prime urban areas with excellent residential conditions through redevelopment projects, coupled with successive real estate regulation relaxations that led investors to perceive Seoul apartments as safe assets, resulting in a massive influx into the pre-sale market.
In fact, three out of four complexes offered in Seoul this year were supplied through redevelopment projects. Last month, ‘Yeongdeungpo Xi Dignity’ (198.76 to 1), a city environment redevelopment project in Yangpyeong 12th district, Yeongdeungpo-gu, and ‘Centreville Asterium Signature’ (11.36 to 1), a housing reconstruction redevelopment project in Yeokchon 1 district, Eunpyeong-gu, were sold, and this month, ‘Hwigyeong Xi Decencia’ (51.71 to 1), a housing redevelopment project in Hwigyeong 3 redevelopment promotion district, was supplied. All three complexes recorded high double-digit competition rates in first-priority subscriptions, and the two complexes sold last month achieved 100% contract completion.
Additionally, most areas in Seoul were removed from regulation zones under the 1.3 Real Estate Measures, significantly easing subscription qualifications and loan conditions. From this month, the resale restriction period was also reduced to a maximum of three years, allowing resale before move-in, which concentrated subscription accounts.
In Gyeongsangnam-do, one complex drove the competition rate. ‘Changwon Lotte Castle Forest,’ supplied by Lotte Construction in January in Uichang-gu, Changwon-si, recorded an average subscription competition rate of 28.36 to 1 with 26,994 applicants for 952 units in first-priority subscription applications. This complex is the last large-scale branded apartment newly supplied in old Changwon, and the resale restriction period was shortened from three years to one year at the time of sale, attracting strong interest from buyers.
Moreover, since Changwon-si was promoted to a special city in 2020, various development benefits such as the construction of an eco-friendly marine tourism new city, the establishment of Gusan Marine Tourism Complex, and the building of Changwon City Museum have been planned, which is also analyzed to have significantly influenced the concentration of subscription accounts by enhancing urban competitiveness.
New apartments are also expected to be offered in Seoul and Gyeongsangnam-do in the second quarter of this year, drawing attention.
First, in Seoul, Doosan Construction plans to offer ‘Saejeol Station Doosan We've Trageum’ in May at 170-12 Sinsa-dong, Eunpyeong-gu. This complex, supplied through the Sinsa 1 district reconstruction redevelopment project, will be built with six buildings ranging from two basement floors to 18 floors above ground, totaling 424 units with exclusive areas of 59 to 84 square meters, of which 235 units will be for general sale.
Samsung C&T Construction Division plans to offer ‘Raemian La Grande’ within this year at 257-42 Imun-dong, Dongdaemun-gu. This complex redeveloped from Imun 1 redevelopment promotion district will consist of 39 buildings from five basement floors to 27 floors above ground, totaling 3,069 units, with 920 units for general sale.
In Gyeongsangnam-do, HDC Hyundai Development Company will offer ‘Changwon Sinwol I-Park’ in May at 90 Sinwol-dong, Seongsan-gu, Changwon-si. This complex, developed through the Sinwol 2 district reconstruction redevelopment project, will have 12 buildings from two basement floors to 33 floors above ground, totaling 1,509 units, with 142 units supplied for general sale.
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