[Real Estate Investment] 3 Billion Won in Magok and 4 Billion Won in Hanam 'New Homes' 3,300 Units Released

Special Supply Starts on the 16th, Over 3,300 Households in 7 Seoul Metropolitan Areas
Magok and Hanam Gyosan Expected to Attract Subscription Popularity
15% Youth Special Supply in Sharing and Selective Types... Opportunity for 2030 Generation

The third pre-sale application for the public sale housing ‘New:Home,’ which allows you to purchase your own home at prices lower than the market rate, will begin this month. Amid growing concerns about the housing supply shortage, a large number of units in popular metropolitan areas such as Magok District in Gangseo-gu, Seoul, and Gyosan District in Hanam, Gyeonggi Province, are included, attracting the interest of those without homes.

According to the Ministry of Land, Infrastructure and Transport on the 11th, applications for pre-sale will be accepted from the 16th to 17th for special supply and from the 18th to 19th for general supply, covering 3,295 units across seven metropolitan districts. This third pre-sale is divided into ▲Sharing Type ▲General Type ▲Selectable Type. The supply includes Magok 10-2 in Seoul (260 units, Sharing Type), Hanam Gyosan A5 in Gyeonggi (452 units, Sharing Type), Ansan Jangsang A12 (440 units, Sharing Type), Namyangju Jinjeop2 A6 (381 units, General Type; 287 units, Selectable Type), Guri Galmae Station Area A4 (230 units, General Type; 285 units, Selectable Type), Incheon Gyeyang A6 (614 units, General Type), and Gunpo Daeyami A1 (346 units, Selectable Type).

The Sharing Type is priced at about 70% of the market price, and upon resale, the buyer receives 70% of the profit or loss. The General Type is the same as the existing public sale, priced at about 80% of the market price. The newly introduced Selectable Type allows residents to live as tenants for six years before deciding whether to purchase. For Namyangju Jinjeop2, the deposit is 69.31 million KRW with a monthly rent of 560,000 KRW, and for Guri Galmae Station Area, the deposit is 91.31 million KRW with a monthly rent of 610,000 KRW. The sale price is calculated as the average of the appraised value at move-in and at sale, and long-term low-interest loans are supported upon conversion to sale.

Seoul ‘Magok’ attracts attention... Land lease fee of 700,000 KRW is a burden

The most notable location is the land lease-type (Sharing Type) sale housing in Magok 10-2, Gangseo-gu. It is the only pre-sale complex supplied in Seoul. It is a station area located between Songjeong Station and Magok Station on Subway Line 5. All units have an exclusive area of 59㎡, with an estimated sale price of 311.19 million KRW.

However, it is important to note that Magok District’s land lease-type sale housing means the land is publicly owned, and only ownership of the building is sold. Additionally, a monthly land lease fee of 697,600 KRW is a burden. Compared to the second pre-sale in June, where the monthly land lease fee for a 59㎡ unit in Godeok Gangil 3 Complex was 400,000 KRW (estimated sale price 350 million KRW), this is considerably higher.

Nonetheless, the real estate industry expects popularity due to price competitiveness and the fact that buyers can benefit from the increase in building value. For example, a similar-sized apartment in nearby Magok-dong, ‘Magok 13 Complex Hillstate Master,’ was traded last month for 1.13 billion KRW, indicating that the sale price of Magok District’s sale housing is significantly cheaper than the market price. Kim In-man, director of the Real Estate Economy Research Institute, said, “Considering that the monthly rent for a newly built apartment in nearby Magok-dong is about 1 million KRW with a deposit of 400 million KRW, the price competitiveness and the ability for buyers to benefit from building value appreciation suggest it will be successful.”

Public Sale New Home Phase 3 Preliminary Subscription. [Image provided by Ministry of Land, Infrastructure and Transport]

The Sharing Type Hanam Gyosan A5 is also expected to be popular due to the planned new subway station on the extension of Line 3 within the district and its excellent accessibility to Gangnam and Songpa districts in Seoul. The estimated sale prices for Hanam Gyosan A5 by exclusive area are 357.1 million KRW for 46㎡ (10 units), 421.84 million KRW for 55㎡ (56 units), and 456.39 million KRW for 59㎡ (386 units). Notably, the estimated sale price for the 59㎡ units, which make up the majority, is cheaper than the estimated sale price of 486.95 million KRW for the same size in Hanam Gyosan A2 supplied in the November 2021 pre-sale. However, when selling the profit-sharing Sharing Type Hanam Gyosan pre-sale housing, 30% of the capital gains must be shared with LH.

‘Youth Special Supply’ allocated 15% each... Opportunity for 2030 non-homeowners

In particular, a certain percentage of the Sharing Type and Selectable Type units, including popular areas like Magok 10-2 and Hanam Gyosan, are allocated for ‘Youth Special Supply’ for young non-homeowners. The Youth Special Supply targets unmarried young people aged 19 to 39 who have never owned a home, with 15% allocated each in the Sharing and Selectable Types. Unmarried young non-homeowners under 39 can increase their chances of owning a home by utilizing the Youth Special Supply system.

For Youth Special Supply, applicants can apply even if they are not the head of the household and live with parents who own a home. Applicants must have a monthly average income of 140% or less of the one-person household standard and personal net assets of 289 million KRW or less. However, to prevent so-called ‘parental advantage,’ applications are restricted if the parents’ net assets exceed 1.083 billion KRW.

Director Kim In-man said, “Despite recent controversies over high sale prices, complexes with high competition rates are emerging. All the pre-sale units this time are in highly preferred areas and competitively priced, so I recommend non-homeowners prepare a strategy to apply actively in districts with high winning probabilities.”