"Why Rent When You Can Buy?" Sentiment Spreads
Rising Interest in GTX and Brand Apartment Applications
Construction companies are selecting only the most valuable complexes for sale this month. Despite the economic downturn, they are putting only the complexes that can secure sales performance on the market. However, the current market situation shows apartment prices falling while jeonse prices are rising, leading to forecasts that more actual buyers may prefer to purchase rather than rent. Experts advise buyers aiming to select a smart single property to choose ‘brand apartments.’
◆Supply volume halved= According to real estate brokerage platform Zigbang on the 17th, the nationwide apartment supply volume in February was 12,676 units (7,821 general sales units), down 51% from the same period last year (25,974 units). Real Estate R114 also reported that the top 10 construction companies by construction capability plan to supply 107,612 units this year, which is over 50,000 units less than last year’s 155,892 units.
While supply volume has significantly decreased, changes in the jeonse market are stimulating the ‘own home acquisition’ sentiment. According to KB Kookmin Bank, nationwide apartment jeonse prices rose for the 10th consecutive month last month, pushing the jeonse rate (the ratio of jeonse price to sale price) up to 68%. This is the highest level since November 2022, when KB Kookmin Bank expanded its price survey sample. Seoul also saw a sharp rise in jeonse prices. The jeonse rate, which had fallen to 50.8% in April 2023, rebounded to 54.1% last month, reaching a peak. During the same period, sale prices nationwide fell by 0.55%, but jeonse prices rose by 2.07%. In Seoul, sale prices rose by 3.11%, but the increase in jeonse prices was nearly double at 6.18%.
Prospective homebuyers are receiving consultation related to subscription at the model house. Photo by Kang Jin-hyung
◆Interest in GTX beneficiary areas in the metropolitan area and Daejeon’s first ‘Lotte Castle’= As apartment supply decreases and jeonse prices rise, buyers are struggling to secure a smart single property. They are rushing to apply for complexes with high value in terms of location and brand. In this atmosphere, new apartments attracting actual buyers’ interest are accepting applications this week in the metropolitan area and provinces.
In the metropolitan area, Korea Land and Housing Corporation (LH) will hold the main subscription from the 19th for blocks A-4, S-5, and S-6 in Goyang Changneung District, Goyang City, Gyeonggi Province. This area is being developed around GTX-A Changneung Station, scheduled to open in 2030. Given the highest competition rate of 165 to 1 during the preliminary subscription, high interest is expected in the main subscription as well. The general sale volume is 391 units. Following this, ‘Elif Okjeong Signature’ (489 units) in Yangju City, Gyeonggi Province, and ‘Pyeongtaek Cheongbuk Sarangro Booyoung 2nd’ (remaining units after priority sale conversion, 39 units) in Pyeongtaek City will also accept applications.
In Daejeon, Lotte Construction will introduce ‘Daejeon Lotte Castle The First’ through the reconstruction of the 2nd district in Gao-dong, Dong-gu. Applications will be accepted from the 20th. Of the 952 units, 394 are general sale units. This is the first ‘Lotte Castle’ brand apartment supplied in Daejeon, featuring differentiated community facilities such as a sky lounge. On the same day, ‘Gwangju Cheomdan 2nd District Sarangro Booyoung’ (remaining 176 units) in Buk-gu, Gwangju, will also find new owners.
◆Brand value is an important variable in the sales market= The industry expects a high preference for brand apartments. In places with emerging residential areas, development benefits, or where large construction company brand apartments are built, such as ‘Eco City The Sharp 4th Phase’ in Deokjin-gu, Jeonju City, Jeonbuk (191.21 to 1), ‘The Sharp Tangjeong Infinity City’ in Asan City, Chungnam (52.58 to 1), and ‘Cheongju Technopolis Atera’ in Cheongju City, Chungbuk (47.39 to 1), many applicants gathered. Even in Daegu, known as a ‘non-sale graveyard,’ ‘e-Pyeonhansesang Myeongdeok Station First Mark’ broke through the sluggish atmosphere with an average competition rate of 11.3 to 1 and a maximum of 33.9 to 1, achieving success.
A real estate industry official said, "Although the subscription market is not like before, complexes with definite advantages such as transportation benefits like GTX, natural environment, and brand are still attracting buyers’ attention," adding, "As supply from large construction companies decreases and scarcity increases, such complexes will receive even more attention."
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