Otier Fore in Seongsu: 688-to-1 Competition for First-Priority Subscriptions
Expected Market Profit Exceeds 1 Billion Won
Riverscent Prugio Weave in Yeongdeungpo: 191-to-1 Competition
Contract Cancellations Likely to Increase After New Regulations
Just before the recently announced lending regulations by financial authorities, a surge of demand rushed into the subscription market as buyers tried to secure loans before the new rules took effect. In Seoul, two apartment complexes opened first-priority subscriptions, receiving over 40,000 applications. This concentrated demand is attributed to the fact that, under the new lending regulations, loan limits will be reduced to 600 million won or less, prompting many to apply for subscriptions before the rules are enforced.
According to Korea Real Estate Board’s subscription platform on July 9, Otier Fore received 27,525 applications for 40 available units in its first-priority subscription round, resulting in an average competition rate of 688 to 1. The highest competition was for the 84㎡B type, where 3,314 applicants vied for just 2 units, resulting in a competition rate of 1,657 to 1.
Otier Fore is a redevelopment project of the Seongsu Jangmi Apartment in Seongsu-dong 1-ga, Seongdong-gu, and will consist of 287 units. The average sale price is set at 73.71 million won per 3.3㎡. For the 84㎡ units, the sale price is set between 2.4126 billion and 2.486 billion won. Compared to nearby market prices, the potential profit is estimated to exceed 1 billion won.
On the same day, Riverscent Prugio Weave also recorded a triple-digit competition rate. In the first-priority subscription, 15,882 applicants competed for 83 units, resulting in an average competition rate of 191.3 to 1. For the 59㎡A type, 5,827 applicants competed for 10 units, recording the highest competition rate at 582.7 to 1. Including 1,218 applications from other regions, the competition rate rises to 704.5 to 1.
This complex, constructed by Daewoo E&C and Doosan E&C, is being supplied as part of the Yeongdeungpo 1-13 Urban Environment Redevelopment Project and will consist of up to 33 floors and 659 units. The average sale price is set at 48 million won per 3.3㎡. The sale price for exclusive 84㎡ units ranges from 1.5741 billion to 1.6974 billion won. Based on standard-sized units, buyers are expected to realize a profit of around 100 million won compared to nearby complexes.
The high competition rates for these two complexes are attributed to two factors: they are located in highly desirable areas, and there was a rush of demand to beat the lending regulations. For subscription complexes in the Seoul metropolitan area and other regulated regions, those whose recruitment announcements are made after June 27, following the announcement of the new lending regulations, will be subject to a 600 million won limit on balance loans. However, those whose announcements were made before June 27 or who have received management disposition approval will not be subject to the 600 million won limit or the requirement to reside in the property when converting interim or relocation loans to balance loans.
There are also predictions that, following the lending regulation, the subscription market will see a more pronounced concentration in Seoul and increased polarization within regions. As "blind subscriptions"?where applicants enter without a thorough financial plan?become more difficult, the market is likely to shift toward genuine end-users. The success or failure of complexes supplied after the lending regulation will also prompt construction companies to carefully consider the timing of their sales launches.
Kwon Il, head of research at Real Estate Info, said, "For complexes whose announcements are made after June 28, the number of contract cancellations may increase more than usual due to lending regulations and other factors. Since buyers will need a learning period, cancellations are likely to be higher at first," adding, "The subscription results for complexes released in mid-July will serve as a litmus test for future sales. If subscription volumes in Seoul’s Gangbuk area perform well, the market sentiment may remain stable, but if results are poor, construction companies may delay supply and closely monitor the situation."
Meanwhile, among complexes in non-metropolitan areas, "Daegu Beomeo 2nd I-Park" closed its first-priority subscription round. For 43 available units, 3,233 applications were received, resulting in an average competition rate of 75.2 to 1. For the 84㎡A type, 891 applicants competed for 6 units, resulting in the highest competition rate of 148.5 to 1. The high competition rate is attributed to its location within Suseong-gu’s school district and lifestyle infrastructure, as well as its lower sale price compared to last year’s Beomeo 1st I-Park.
In Pyeongtaek Godeok New Town, "Godeok Jayeon&House D (A4BL)" also held its first-priority subscription round. For public housing (public sale), 621 applications were received for 110 units, resulting in a competition rate of 5.65 to 1. In particular, the 84㎡A type recorded the highest competition rate at 12.36 to 1. For private housing, which consists only of 98㎡ units, the competition rate was 4.58 to 1, so second-priority subscriptions will be accepted.
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