‘ePyeonhanSesang Dapsimni Artefore' Unsubscribed Units 2nd Non-Priority Subscription
Sangdo and Dobong Complexes Also See Numerous Unsubscribed Units
Last Month, Nationwide Average Sale Price 17.36 Million KRW per Pyeong
Up 12.29% Year-on-Year
An unusual trend is being detected in the Seoul housing market, once known as 'subscription undefeated.' Multiple rounds of unsold units are being observed in various locations. Analysts attribute the expansion of unsold units primarily to increased sale prices amid growing uncertainties in the construction industry. However, with housing prices gradually declining, concerns are raised that the trend of expanding unsold units due to high sale prices may continue.
Cracks Appear in Seoul's 'Subscription Undefeated'
According to Korea Real Estate Board's Subscription Home on the 26th, 'ePyeonhansesang Dapsimni Artefore' in Dongdaemun-gu, Seoul, conducted a second round of non-priority subscription on the 23rd. For 15 units, 1,286 people applied. This complex, which had 121 general sale units, succeeded in its initial subscription last October with a competition rate of 6.1 to 1 for special supply (97 units) and 100 to 1 for general supply (24 units). Although the subscription was difficult to secure, as the contract period approached, 54 units were forfeited. Consequently, a first round of non-priority subscription was held on the 2nd of this month. This attracted 3,138 applicants, recording a competition rate of 58.1 to 1. However, with more forfeitures, the unsold units could not be cleared.
High sale prices are cited as the decisive factor for contract forfeiture. The sale price for an 84㎡ unit in this apartment was set between 1.043 billion and 1.154 billion KRW. Compared to the actual transaction price of a nearby complex, 'Doosan We’ve' (completed in 2006), which was 950 million KRW for an 84㎡ unit last October, this is about 100 to 200 million KRW more expensive. Park Jimin, head of Wolyong Subscription Research Institute, explained, "Since it was a public sale, there was an expectation that the sale price would be 20-30% cheaper than general private apartments, but it was priced even higher, leading to market rejection."
The situation is more severe at 'Sangdo Prugio Clavenue (771 units)' in Dongjak-gu, scheduled for move-in this March. After the first and second priority subscriptions last September and three months of first-come-first-served contracts, 197 units remained unsold, eventually moving to non-priority subscription. Only 39 units were actually contracted in the first non-priority subscription. In the second non-priority subscription on the 16th for 158 units, about half were contracted. The sale price of this complex was also set higher than the market price. For an 84㎡ unit, it was around 1.27 billion to 1.38 billion KRW, while a nearby complex, 'Sangdo The Sharp 1st' (completed in 2007), recently traded at 1.23 billion KRW for the same size.
'Dobong Kumho Eoullim River Park' in Dobong-gu also has contract cancellations and has been conducting first-come-first-served contracts since last month. In the first priority subscription held last November, 551 applicants competed for 68 units, resulting in an average competition rate of 8 to 1. The sale price ranged from 830 million to 905 million KRW for an 84㎡ unit, which is relatively affordable within Seoul. However, compared to surrounding market prices of 400 to 500 million KRW, it is high.
Sale Prices Skyrocket, Housing Prices Decline
Recently, private apartment sale prices have continued to rise. On the other hand, housing prices are trending downward, leading to forecasts of an increase in unsold units in the future.
According to the Housing and Urban Guarantee Corporation (HUG), as of the end of December last year, the average sale price of private apartments nationwide was 17.3613 million KRW per 3.3㎡. This is a 1.51% increase from the previous month (5.183 million KRW per ㎡) and a 12.29% increase compared to the previous year (4.685 million KRW per ㎡).
Meanwhile, according to the Korea Real Estate Board, as of the fourth week of January (22nd), nationwide apartment prices fell by 0.05% compared to the previous week (-0.04%), widening the decline. Prices have fallen for nine consecutive weeks since the last week of November last year. Seoul apartment prices also dropped by 0.03% compared to the previous week (-0.04%), marking seven consecutive weeks of decline since the first week of December last year. The Real Estate Board explained, "Due to uncertainties in the real estate market, buyer hesitation is deepening, and inquiries are sparse, leading to a continued downward trend."
Park said, "This phenomenon is occurring in complexes that are not cheap compared to market prices and have little time left before move-in. If unsold units continue to occur, they will have no choice but to ease contract conditions or offer discounted sales."
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