12,000 Housing Units for Sale in Gangnam 3 Districts This Year
Seoul Sees Highest Competition Rate in 3 Years
Only 4,896 Units Scheduled for Sale Next Year
Subscription Heat May Cool Compared to This Year
This year, the apartment subscription competition rate in Seoul reached its highest level in three years. The subscription fever was led by a large supply of apartments in the Gangnam area, where there is high waiting demand and an expected market price gain of several hundred million won. However, next year, as the supply in the Gangnam area is expected to decrease to about one-third, it is anticipated that the subscription overheating trend will subside.
According to Real Estate R114 on the 31st, the average subscription competition rate in Seoul this year, as of the 24th, was 113.41 to 1, the highest level in three years. This contrasts with the national average subscription competition rate of 12.6 to 1, and the Gyeonggi and Incheon areas, which are part of the metropolitan area, recording 10.74 to 1 and 5.9 to 1, respectively. Yoon Ji-hae, chief researcher at Real Estate R114, said, "In Seoul, a rate of about 30 to 1 is usually considered overheated. Recording a three-digit number means there was a large amount of 'blind subscription' demand where people apply without much consideration."
The Gangnam 3 districts (Seocho, Gangnam, Songpa) raised the average subscription competition rate. The ‘DH Daechi Edelweiss’ in Daechi-dong, Gangnam-gu, which was supplied in October, recorded an average competition rate of 1025 to 1, and ‘Cheongdam Le El’ in Cheongdam-dong, Gangnam-gu, supplied in September, reached 667.26 to 1. In addition, prime units that subscription applicants had been waiting for, such as Maple Xi, Raemian One Pentas, and DH Bangbae, were released this year. It was the first time in three years that supply was available in the Gangnam 3 districts.
The Gangnam 3 districts have many waiting applicants due to their excellent locations. Along with this, the expectation of market price gains attracted many subscription accounts. Currently, the price ceiling system is applied only in the Gangnam 3 districts and Yongsan-gu in Seoul. Because the sale price cannot be set higher than surrounding market prices, winning the subscription alone can yield a market price gain of several hundred million won. Additionally, the rising house prices and preference for new buildings further increased the number of applicants.
This atmosphere spread throughout Seoul, coinciding with the rising house prices. As of August, the average subscription competition rate in Seoul was 140 to 1, raising expectations that it might break the all-time high. However, due to government loan regulations in the second half of this year, the market has somewhat cooled, and subscription enthusiasm in non-Gangnam areas has also weakened. In Nowon-gu, Seoul One I-Park saw a shortage of first-priority applicants for large units, and many who won later gave up their contracts. On the 26th, The Sharp First World in Jungnang-gu, which closed first priority applications, saw some large units fail to meet the first-priority local or overall first-priority quota.
Next year, subscription enthusiasm is likely to cool further compared to this year. The supply in the Gangnam 3 districts is expected to decrease significantly. According to Real Estate R114, the supply in the Gangnam 3 districts this year was 12,248 units, accounting for 46% of the total in Seoul. Next year, it is estimated to be 4,896 units, about 22%. Planned supplies include Raemian Wonperla in Bangbae-dong, Seocho-gu, Arc Road Seocho in Seocho-dong, and Jamsil Le El in Sincheon-dong, Songpa-gu.
Chief researcher Yoon said, "There is a preference for new apartments, but since the supply does not meet the demand, this preference may strengthen further. Depending on location and price, polarization may occur. The concentration on specific complexes in the Gangnam area, where market price gains are expected, may intensify."
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