Ultimately, Location Boosted Subscription Competition Rates...Significant Increase in Gangnam Area Housing Sales

No New Apartments in Gangnam 3 Districts from 2022 to 2023
6 Complexes with 1,066 Units for General Sale This Year

38% of Total Supply, 73% of Subscription Applications
Competition Rate Twice the Average Difference

This year, a large volume of housing units in the Gangnam 3 districts has been released, boosting the subscription fever. The supply in the Gangnam 3 districts, which has returned after a long time, is expected to continue until next year.

Exterior view of Raemian One Pentas in Banpo-dong, Seocho-gu

According to the Korea Real Estate Board's Subscription Home on the 2nd, a total of 21 apartment complexes have been supplied in Seoul from January this year to the present, of which 6 are located in the Gangnam 3 districts (Seocho, Gangnam, Songpa). The supply volume amounts to 1,066 units out of a total of 2,826 units, accounting for 38% of the total. Including the 4 complexes supplied in Gangdong, the Gangnam 4 districts account for 48% of the total, nearly half.

It has been three years since supply volumes appeared in the Gangnam 3 districts. In 2022 and last year, most of the supply was in the outskirts of Seoul, such as Geumcheon and Gangbuk districts. In 2021, only Seocho-gu's Raemian One Bailey was supplied.

The increase in supply in the Gangnam 3 districts is largely due to the resolution of the previously stagnant construction cost conflicts. Maple Xi, Raemian One Pentas, and Cheongdam Le El were actually scheduled for supply in 2022 or last year but were supplied this year. Maple Xi's supply was delayed due to relocation delays and conflicts over construction cost increases, and Cheongdam Le El's construction was halted due to conflicts over construction cost increases despite exceeding 50% progress, delaying its supply. Raemian One Pentas completed construction before supplying. As the depressed real estate market until last year revived this year, conflicts were resolved and supply was expedited.

With the long-awaited premium supply in the Gangnam 3 districts pouring out, subscription competition rates have soared significantly. So far, the subscription competition rate in Seoul is 150.4 to 1, marking a three-digit figure for the first time in three years since 2021. In 2022, it was 10.9 to 1, and last year it was 57.3 to 1. Especially, the subscription competition rate in the Gangnam 3 districts this year is 289.7 to 1, greatly exceeding the overall rate. A total of about 425,000 people applied for subscriptions in Seoul this year, of which about 300,000 concentrated in the Gangnam 3 districts, accounting for 73% of the total. Yoon Ji-hae, Senior Researcher at Real Estate R114, said, "The reason for the surge in applications is that the price ceiling system allows for capital gains, and the three-year exemption from the residence obligation also attracted many applicants," adding, "This reconfirms that premium locations still have overwhelming demand."

Supply in the Gangnam 3 districts will continue. Starting from the 8th, subscription for The H Daechi Edelweiss will begin. At the end of the year, in Seocho-gu, Acro Ritz County (Bangbae Samik reconstruction) and Raemian One Perla (Bangbae 6 district reconstruction) are scheduled for supply. In Songpa-gu, Jamsil Raemian I-Park (Jamsil Jinju reconstruction) is preparing for supply after resolving construction cost conflicts. The general supply volumes are considerable, with Raemian One Perla offering 465 units and Jamsil Raemian I-Park 589 units. Next year, major supply projects such as Seocho-gu's Raemian Trini One (Banpo 3 district) and The H Clast (Banpo 1, 2, 4 districts) are expected to enter the subscription market.