"Don't Know Until Stamping"... 'Jjubjub' Surges Amid Blind Subscription

Many Cases of Winning and Giving Up After Entering Without Financial Planning
Impact of Deregulation in Restricted Areas

Even when new apartment sales achieve full subscription, cases of non-contracting are pouring in where actual contracts are not finalized.

Some cases involve giving up the winning spot because the assigned building or unit number is unsatisfactory, or cancellations due to incorrect application scores, but most are situations where applicants submit bids without a financial plan and then feel burdened by funding when they actually win, leading them to forfeit.

Industry insiders analyze that factors such as the lifting of regulatory area restrictions have played a role, while also lamenting that additional expenses like promotional costs arise due to subsequent priority subscription processes.

According to the sales industry on the 17th, 'Imun I-Park Xi,' supplied by HDC Hyundai Development Company and GS Construction in Imun-dong, Dongdaemun-gu, Seoul, conducted a non-priority (jump subscription) application for 152 units on the 15th. Although it was sold out during the initial sale with a competition rate of 16.9 to 1, about 9.7% of the total 1,467 units remained uncontracted when the contracts proceeded.

At 'Bomun Central I-Park' in Dongdaemun-gu, Seoul, which was sold in September, 24 units, accounting for 28% of the 97 supply units, were released through non-priority subscription during the contracts conducted in October. This complex was highly popular, recording a first-priority subscription competition rate of 78.1 to 1.

'The Sharp Gangdong Central City' in Gangdong-gu, Seoul, sold in October, also had 27 units, or 16.1% of the total 168 units, uncontracted. This complex recorded an average competition rate of 86 to 1 during the first-priority subscription, with 11,437 applicants for 133 units.

In the same area, 'Gangdong Prestige One' also failed to contract 8 units out of 133. This complex also closed first-priority subscriptions in October with an average competition rate of 86 to 1.

All these complexes succeeded in clearing uncontracted units through subsequent priority subscriptions, but they had to spend additional costs such as re-promoting to avoid being stigmatized in the market as non-contracted apartments.

An official from a major construction company said, “No matter how high the subscription competition rate is, you cannot be assured until the contract is signed,” and added, “When a large number of uncontracted units occur, additional costs such as separate promotional expenses and website maintenance arise, causing significant losses.”

The sales industry points to the lifting of regulatory area restrictions as the cause of the increase in non-contracting due to reckless subscription. Until last year, Seoul was designated as a regulated area, imposing penalties that prohibited fraudulent applicants or those who gave up subscriptions from applying for 10 years.

However, with the government's 1·3 real estate measures earlier this year, all areas except the three Gangnam districts (Gangnam, Seocho, Songpa) and Yongsan-gu were removed from regulated areas, weakening penalties for subscription dropouts.

While reusing subscription savings accounts is prohibited, the required period has been significantly reduced. To cancel a contract and apply for the next subscription, a new subscription savings account must be created, and depending on the area, only 1 to 2 years of membership and 12 to 24 monthly payments are required.

An anonymous sales industry official said, “Thanks to deregulation, it is fortunate that the sales market in Seoul and the metropolitan area has somewhat revived, but since market distortion caused by reckless subscriptions is a concern, measures to curb this seem necessary.”