"Isn't the Move-in Next Year?"... Empty Apartment Construction Site [PF Crisis Aftermath]②

Complexes Scheduled for Move-in in June 2025
Construction Has Not Started Due to Deteriorating Profitability
Construction Suspended or Canceled in Many Areas
Pre-Subscription Winners Inevitably Suffer Losses

On the 1st, a fierce sea breeze swept through an apartment construction site on Yeongjongdo Island. The dark gray cement, partially unpacked, was occasionally blown away by the wind. The marble and bricks stacked nearby were frozen solid. Inside the construction site, which was not fully visible, there was a wheelbarrow. Inside it were a cold safety helmet, a work vest, and a broom tangled together. These items should have been soaked with the sweat of workers. With that warmth, work to build seven 20-story apartment buildings on a site of about 10,000 pyeong (33,000㎡) should have been in full swing. However, since the real estate project financing (PF) crisis that led to Taeyoung Construction's workout earlier this year, the construction has shown no signs of starting amid the deepening economic chill.

On the 24th, the construction site of the ‘Yeongjong Sky City A41BL Hanshin The Hue’ apartment in Jungsan-dong, Jung-gu, Incheon. Although scheduled for occupancy in June 2025, the site is completely empty. Photo by Kwon Hyunji

Construction Can't Even Start Due to Deteriorating Profitability

This site was scheduled to have the ‘Yeongjong Haneul City A41BL Hanshin The Hue (440 households)’ apartment complex, aiming for move-in by June 2025. The project was to be implemented by Dream Park Development (an affiliate of Hanshin Engineering & Construction), with construction handled by Hanshin Engineering & Construction. However, with construction halted, meeting the scheduled move-in date has become difficult. A real estate agent met nearby said, "It usually takes more than two and a half years to build an apartment, so moving in by June next year is impossible no matter what."

The apartment is subject to the price ceiling system, but soaring labor and raw material costs have made it difficult to maintain profitability. In this situation, the results of the pre-sale subscription were also disappointing. Anxiety about the economy translated into poor subscription results, making construction difficult. Yoon Soo-min, a real estate specialist at NH Nonghyup Bank, explained, "Incheon has an oversupply and housing prices are falling, so it is hard to improve profitability. Especially with many small and medium-sized construction companies involved, cases of construction suspension or abandonment are occurring."

On the 24th, concrete bricks and plastering cement were piled up at the construction site of the 'Yeongjong Sky City A41BL Hanshin The Hue' apartment in Jungsan-dong, Jung-gu, Incheon. Photo by Kwon Hyunji

On the 24th, concrete bricks and marble were piled up at the construction site of the 'Yeongjong Sky City A41BL Hanshin The Hue' apartment in Jungsan-dong, Jung-gu, Incheon. Photo by Kwon Hyunji

‘Suspended’ Everywhere... Some Complexes Even Canceled

Local real estate offices said that the nearby ‘Incheon Yeongjong 1st Dietre RC4-1,2BL Mixed-use Complex’ built by DB General Construction and DB Housing has not even broken ground due to the downturn. Another real estate agent said, "It is a large complex with over 1,000 households, so inquiries come in occasionally, but we inform people that it is uncertain whether it will take two years or eight years to move in."

There are also cases where projects have been canceled altogether. A representative example is the ‘Incheon Gajeong 2 District Woomirin B2 Block’ project promoted by Simwoo Construction, an affiliate of Woomi Construction. After the main subscription in March last year, move-in was scheduled to start in November next year, but due to the real estate market downturn, both the main subscription and move-in dates were delayed, and construction cost increases delayed permits, ultimately leading to project cancellation.

Pre-sale Winners Inevitably Suffer Losses

As the construction halt and project cancellations deepen the downturn in various ways, those who pre-subscribed to these apartments have been thrown into a dilemma. Pre-subscription is a system where some units are offered for subscription 1-2 years before the main subscription, selling based on land acquisition alone, which differs from general subscriptions. If the contract deposit is not paid or documents are not submitted at the main subscription, the pre-subscription is automatically canceled and the subscription savings account is restored.

However, those intending to live in the subscribed apartments face the need to change their housing plans due to delayed move-in. For Yeongjong Haneul City A41BL Hanshin The Hue, 375 units were pre-subscribed in August 2022, with 192 households winning the status of winners, and for Incheon Yeongjong 1st Dietre, 1,358 households applied for 868 units in the July 2022 pre-subscription.

Yoon explained, "Pre-subscription winners who have been living in rented housing to maintain their non-homeowner status until the main subscription must be bewildered. The disruption of future housing plans due to construction delays is also a significant problem."