Move-in Rights for 59㎡ Unit Surpass 2 Billion KRW
Price Doubles Compared to General Sale Price
Soaring Demand Driven by Preference for Large Complexes
Premium Added Due to Low Pre-sale Price
"There are many people looking for move-in rights. They just can't sell because the price doesn't match." (Gangdong-gu A Real Estate Agency)
The price of move-in rights for Olympic Park Foreon in Gangdong-gu, Seoul, which once faced a non-contract situation due to high pre-sale price controversy, is soaring. The move-in right for a 59㎡ exclusive area exceeded 2 billion KRW this month. The price per pyeong (3.3㎡) is on the verge of surpassing 80 million KRW. This is the result of the 'Eoljuksin (newly built no matter how cold)' phenomenon that has been established in the market for years, combined with the 'Eoljukdae (large complex no matter how cold)' phenomenon that prefers large complexes.
Price per pyeong Approaching 80 Million KRW... Doubled Compared to General Sale Price
According to the Ministry of Land, Infrastructure and Transport's real transaction price disclosure system on the 20th, the move-in right for Olympic Park Foreon with an exclusive area of 59㎡ was traded at 2,052,360,000 KRW on the 23rd of last month, setting a new record. The previous record was 1,960,000,000 KRW traded earlier that month. The price rose by 92,360,000 KRW in less than a month. The move-in right for this area was traded in the 1.7 billion KRW range as recently as May last year.
Compared to the pre-sale price, the price has doubled. Based on the recent record price, the price per pyeong (3.3㎡) of Olympic Park Foreon is 79.56 million KRW. In December 2022, the general sale price of this complex was 1,062,500,000 KRW (highest price basis), with an average price per pyeong of only 38.29 million KRW at that time.
Prices for move-in rights of other areas are also skyrocketing. The move-in right for the popular 84㎡ exclusive area recorded a new high of 2.7 billion KRW at the end of last December. After that transaction, prices fell and continued to change hands between 2.3 billion and 2.4 billion KRW until last month. However, on the 14th, a transaction at 2.65 billion KRW pushed the price close to a new record again. Considering that the general sale price for the 84㎡ exclusive area was 1,320,400,000 KRW at the highest price, a premium of over 1 billion KRW has been added.
Asking prices are also soaring. Before the Lunar New Year holiday, the asking price for the 84㎡ exclusive area was below 2.5 billion KRW, but it has now reached up to 3 billion KRW. On-site, listings below 2.5 billion KRW are quickly disappearing, and asking prices above 2.5 billion KRW are being established. The head of Gangdong-gu B Real Estate Agency explained, "Before the Lunar New Year holiday, asking prices for move-in rights were formed in the high 2.3 billion to mid-2.4 billion KRW range," adding, "After the holiday, actual transactions have been occurring in the 2.5 billion KRW range."
Despite the soaring prices, demand for move-in rights continues unabated. However, it is difficult to secure them because sellers want high prices. The head of Gangdong-gu C Real Estate Agency said, "As prices keep rising, union members who had put their move-in rights up for sale are contacting us saying they want to think about selling for a while."
Preference for New and Large Complexes... Scarcity of Mega Complexes in Seoul Highlighted
The preference for new buildings followed by a preference for large complexes is cited as the cause of the price increase for move-in rights in this complex. As the profit margin from resale of new buildings decreases due to rising pre-sale prices, demand is concentrating on large complexes where residents can enjoy nearby commercial areas and community facilities, even if they are newly built. Olympic Park Foreon is a large complex nicknamed "the largest complex since Dangun." The total number of households reaches 12,000. While Helio City in Songpa-gu, Seoul, and Mapo Raemian Prugio in Mapo-gu are also considered large complexes, they have about 9,510 and 3,885 households respectively.
Additionally, the fact that few units from this complex may be available for sale in the coming years is also stimulating demand. For Olympic Park Foreon, those who moved in through general sales under the pre-sale price ceiling system must fulfill a residence obligation. This means that after the move-in deadline at the end of next month, it will be difficult to find units for sale other than those owned by union members. Especially, the move-in rights held by these union members are likely to have been allocated to favorable directions and floors. Furthermore, it is analyzed that multi-homeowners are paying attention to this complex because they can avoid the heavy acquisition tax on housing when purchasing move-in rights.
Yoon Soo-min, Real Estate Specialist at NH Nonghyup Bank, said, "Recently, there is a high preference for newly built apartments, and among them, demand for large complexes is increasing," adding, "There are not many large complexes with over 3,000 households in Seoul, and it will be difficult for a single apartment complex to surpass Olympic Park Foreon for the time being, so its value is highlighted in terms of scarcity."
Yoon Ji-hae, Senior Researcher at Real Estate 114, said, "In the case of Olympic Park Foreon, the initial pre-sale price was not set high due to the pre-sale price ceiling system, so there was no impact of price drops due to reverse jeonse or urgent sales," and added, "The premium is being added in conjunction with the preference for newly built apartments."
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