The atmosphere in Seoul's subscription market, which had been continuing a sell-out streak and was called the 'Lotto,' is changing. Even in Gangdong-gu, one of the four Gangnam districts, a surge of unsold units has occurred. The first-priority subscription competition rate in Seoul has shrunk to one-third, and the winning score threshold has dropped to the 20-30 point range. It is interpreted that interest in subscriptions is also declining as the apartment purchase market turns cautious due to the burden of interest rates.
According to the real estate industry on the 22nd, 'The Sharp Gangdong Central City,' being built in Cheonho-dong, Gangdong-gu, Seoul, conducted a non-priority subscription for 27 unsold units on the 11th and 12th. This complex is a residential-commercial complex with 670 apartments, 324 officetels, and 221 office rooms, located in a double station area near Cheonho Station on Subway Lines 5 and 8. In the first-priority subscription held last month, 5,751 people applied for 97 units, recording a high average competition rate of 59.3 to 1. However, as cases of giving up just before the contract surged, 27 units, about 16% of the total 168 general sale units, were offered through non-priority subscriptions.
The industry attributes this to the high sale price. The highest sale price for the 84㎡ exclusive area in 'The Sharp Gangdong Central City' was 1.4264 billion KRW. Including balcony expansion fees and options, it approaches 1.5 billion KRW. Considering that nearby complexes of the same size are priced between 1.3 to 1.4 billion KRW, the sale price was perceived as high, leading to contract cancellations.
On the 15th, 'Bomun Central I-Park,' located in Bomun-dong, Seongbuk-gu, conducted a non-priority subscription for 24 units. This complex is a residential-commercial complex with 199 units, built in the immediate vicinity of Bomun Station on Subway Line 6. It recorded a high competition rate of 78.1 to 1 and closed the first priority subscription in September. However, amid controversy over the high sale price, cases of giving up just before the contract surged, and 24 units, accounting for 27.6% of the total 87 general sale units, were offered through non-priority subscriptions.
The competition rate for apartment subscriptions in Seoul is also falling sharply. According to the Korea Real Estate Board, the first-priority subscription competition rate in Seoul last month was 24.8 to 1, which is one-third of September's 77.0 to 1. This is the lowest figure in six months since recording 2.4 to 1 in April this year. The first-priority subscription competition rate in Seoul has been gradually declining after reaching a peak of 122.3 to 1 in June. The lowest winning score also dropped by more than 10 points, from 62.6 in September to 51.6 in October.
As the subscription market cools down, the winning score threshold for Seoul apartments has also fallen to the 20-30 point range. The lowest winning score for 'Dobong Kumho Eoullim River Park' in Dobong-gu, which was supplied this month, was 27 points. In 'Cheonho Station Maestro' in Gangdong-gu, supplied last month, there were winners with a score of 22 points. Just 2-3 months ago, a score of 40-50 points was required to aim for complexes on the outskirts of Seoul, but the atmosphere has changed rapidly recently.
Experts analyze that due to rising interest rates and strengthened loan regulations, demanders are becoming sensitive to sale prices. Since they have to bear high interest, subscription demand is decreasing for complexes where securing a safety margin is difficult. Go Joon-seok, CEO of J-Edu Investment Advisory, said, "With the prolonged high interest rates and strengthened loan regulations, the financial burden on subscription demanders is increasing," adding, "Unless the complex has enough attractiveness to justify the high sale price, such as location, it is likely to face difficulties in reaching contracts."
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