Eight Complexes Including Sejong 'The Siglo' Canceled, Surpassing Last Year
As Builders Withdraw Citing 'Lack of Profitability,' Sale Prices Continue to Rise
Main Sales Delayed and Prices Increased... Damage to Buyers Unavoidable
It has been a year since the pre-sale lottery system was abolished, but the damage caused by cancellations of winning tickets is still ongoing. As of this year, there have already been eight apartment complexes where the pre-sale lottery was conducted, but the main sale could not proceed and the project was canceled. This already surpasses the total number of cancellations last year, which was seven. The winners continue to suffer, as they are forced to change their housing plans due to project delays or bear the burden of increased sale prices.
According to Korea Land and Housing Corporation (LH) on July 8, 'Geumgang Penterium The Siglo,' located in the 4-2 residential district of Sejong City, will terminate its project starting August 1. This project was being carried out by a private developer, and the contractor, Geumgang Housing, recently notified pre-sale lottery winners of the 'complete cancellation of the project.' The project was canceled due to deteriorating profitability and other reasons.
This complex supplied 272 out of a total of 301 units through the pre-sale lottery in 2022. At the time, it drew attention by recording a maximum competition rate of 578 to 1 (with an average of 62 to 1). The main sale was scheduled for September this year. However, pre-sale lottery winners who dreamed of owning their own homes found themselves left out just two months before the main sale.
The pre-sale lottery system was revived in 2021 under the Moon Jae-in administration. The government introduced it to secure early housing supply results by moving up the sales schedule. However, because the system was rushed without completing essential procedures such as land compensation or permits, various side effects occurred. Ultimately, the system was completely abolished in May last year.
Although the system has disappeared, the damage to existing winners continues. This year, in addition to Sejong, there are eight pre-sale lottery projects that have been canceled, including Wonju Taejang Yes Atrium A-2 Block, Gyeongsan Daeim District B3 BL Raon Private, Gyeongsan Daeim District M1BL Bando Yubora, and Paju Unjeong 3 District Mixed-Use Land 1, 2, 5, and 6BL. Including the seven cancellations last year, there have been 15 project cancellations in less than two years. All of these projects had completed the pre-sale lottery before the developers abandoned the projects.
In January, the Ministry of Land, Infrastructure and Transport announced a 'remedy plan for private pre-sale lottery winners whose projects were canceled,' stating that existing winners would be given priority supply rights in complexes developed by subsequent project operators. As a result, it is expected that winners will be able to maintain their status. However, there is no way to know when the projects will resume. Disruptions to the housing plans of pre-sale lottery winners due to project delays are inevitable. Out of the 15 canceled projects, only four have found alternatives, such as successful resale of land, direct implementation by LH, or public-supported private rentals. The remaining complexes are still searching for new developers.
In addition to project cancellations, there are also more than ten cases where the main sale schedule has been postponed. Notable examples include Namyangju Wangsuk 2 A6 Block (postponed from December this year to April 2027) and Ansan Jangsang A1 and A9 Blocks (postponed from May this year to October 2027). Project cancellations or delays in the main sale have led to increased sale prices, further burdening the winners. For example, in the case of Seongnam Sinchon A2 Block, supplied last year, the main sale was delayed by 11 months, resulting in a sale price more than 100 million KRW higher than originally planned.
LH has stated that, for public pre-sale lotteries only, "the corporation will bear part of the increased sale price due to delays." However, for private pre-sale lottery winners where LH is not at fault, there is no separate compensation plan, so they must bear the full burden of the increased sale price. If the apartment brand of the subsequent project is inferior to the original, the winners must also accept this outcome.
A construction company official said, "Land prices are high and sale prices are capped, so it will not be easy to select subsequent project operators for the time being," adding, "The legacy of the pre-sale lottery system is not over yet."
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