Hot Market Returns After 3 Years... Seoul No.1 Subscription Competition Rate Averages 140 to 1

First Triple-Digit Sales Volume Since 2021
Low General Sale Supply Increases Competition Rate
"Profit Realization Incentive Draws Attention"

As apartment sale prices in Seoul rise, the average first-priority subscription competition rate has recovered to triple digits for the first time in three years since 2021. With a growing preference for new apartments, complexes in the Gangnam area subject to the price ceiling system are driving up competition rates. This month, subscriptions are scheduled for 'Cheongdam Le L' in Cheongdam-dong, Gangnam-gu, and a public sale complex redeveloped on the site of the Capital Defense Command (Subangsa) in Noryangjin-dong, Dongjak-gu, followed by 'Jamsil Raemian I-Park' in Sincheon-dong, Songpa-gu next month, indicating that competition rates are expected to remain high.

According to an analysis of Korea Real Estate Board's Subscription Home data by real estate research firm Realtoday on the 3rd, the first-priority subscription competition rate in Seoul from January to August this year recorded 140.66 to 1. This resulted from 346,598 first-priority subscription accounts competing for 2,464 general supply units, marking triple-digit competition rates for the first time in three years. Looking at the annual data (January to December), the competition rate soared to 163.84 to 1 in 2021 when apartment prices rose, then plummeted to 10.25 to 1 in 2022 when the real estate market cooled down. Last year, it remained at 56.93 to 1.

Examining major complexes, recently in Bangbae-dong, Seocho-gu, 'The H Bangbae' recorded an average competition rate of 90.28 to 1 in the first-priority subscription, with 58,684 applicants for 650 units. As a result, all types were closed in the first-priority local area. The highest competition rate was for the 59㎡B unit, which reached 233.08 to 1. In July, 'Raemian One Pentas' received 93,864 applicants for 178 units in the first-priority subscription, resulting in an average competition rate of 527.3 to 1. Among the winners, three held perfect-score subscription accounts, and except for one housing type, the minimum winning score was above 70 points. The Ministry of Land, Infrastructure and Transport plans to investigate allegations of fraudulent subscriptions.

A Realtoday official said, "Since most of Seoul's supply comes from redevelopment projects, the general supply available to buyers is limited, which seems to have led to higher competition rates." He added, "Although high competition rates were recorded in the three Gangnam districts (Gangnam, Seocho, Songpa), complexes in non-regulated areas of Seoul such as 'Mapo Xi Hillstate Rachels' and 'Gyeonghuigung Ubora' also showed competition rates exceeding 100 to 1, indicating strong buyer interest."

The overheated subscription atmosphere in Seoul is expected to continue for the time being. In the case of Cheongdam Le L, the average sale price per 3.3㎡ was 72.09 million KRW, marking the highest ever for complexes subject to the price ceiling system, but considering the surrounding market prices, a price difference of about 1 billion KRW is expected. The nearby 'Cheongdam Xi' 82㎡ unit changed hands for a record high of 3.29 billion KRW in June. Cheongdam Le L consists of 9 buildings ranging from two basement floors to a maximum of 35 floors above ground, with a total of 1,261 households, of which 149 units sized 59 to 84㎡ are supplied to the general public.

The Subangsa complex, which will hold its main subscription this month, is also attracting attention. Out of a total of 556 units, 263 are general supply units excluding 85 happy housing units and 208 military quarters. With views of the Han River and prices about 500 million KRW lower than surrounding market prices, the average competition rate for the preliminary subscription in June last year was 283 to 1. In this main subscription, 39 units will be supplied excluding 224 units allocated to preliminary subscription winners.

In the Jamsil area, a large new complex with a total of 4,543 units will be supplied next month for the first time in 18 years. The main projects are Jamsil Raemian I-Park (2,678 units) and 'Jamsil Le L' (1,865 units). The average sale prices are set at 54.09 million KRW and 51.03 million KRW per 3.3㎡ respectively, which could realize a price difference of about 500 million KRW compared to the nearby 'Helio City' market prices.

Ham Young-jin, head of the Real Estate Research Lab at Woori Bank, said, "If there is an incentive for profit realization, attention is bound to focus on it," adding, "In Seoul, 5,033 units, about 51% of the annual planned supply of 9,861 units based on general supply, have been supplied so far, and the slow pace of supply itself has also influenced the overheated subscription market."