Only 15 Apply for Mudeungsan Gyeongnam Honorsville D1... Disappointing First-Round Subscription

Six-Month Resale Restriction, Interest-Free Interim Payments Still Fail to Attract Buyers
High Sale Prices and a Frozen Gwangju Real Estate Market Lead to Poor Performance
About 95% of Units Remain Unsold... Company Expected to Focus on Clearing Inventory Through Subsequent Rounds and Discretionary Supply

The construction division of SM Steel received a devastating result for its 'Mudeungsan Gyeongnam Honorsville D1' project, supplied in Dong-gu, Gwangju, as it faced a massive shortfall in first-priority subscriptions. This was the first Gyeongnam Honorsville brand in Gwangju. Despite offering favorable sales conditions for buyers, such as a six-month resale restriction and full interest-free interim payments, the market response remained cold.

Mudeungsan Gyeongnam Honorsville D1 Perspective View. SM Group.

According to the Korea Real Estate Board's subscription portal on July 30, only 15 people applied for the first-priority subscription for Mudeungsan Gyeongnam Honorsville D1, which was recruiting 291 units for general supply the previous day. The average competition ratio was just 0.05 to 1. By unit type, 9 applications were received for 161 units of the 84㎡A type, 3 applications for 64 units of the 84㎡B type, and 3 applications for 66 units of the 84㎡C type. All first-priority applicants were confirmed as winners without a lottery.

This outcome is disappointing, especially considering the sales conditions presented by the construction company. The eligibility threshold was significantly lowered, allowing even homeowners or household members aged 19 or older who have been Gwangju or Jeonnam residents and subscribed to a housing subscription account for at least six months to apply. The resale restriction was set at a short six months, with no requirements for actual residence or restrictions on re-winning. In particular, the down payment was reduced to 5%, a fixed first down payment of 10 million won was introduced, and the largest burden?60% of the interim payment?was offered interest-free, highlighting the advantage of virtually no additional costs until the final payment.

Additionally, at the time of sale, the project was actively promoted with a premium strategy, such as 'glass balcony' designs maximizing views of Mudeungsan, an extra-wide 5.3-meter living room, and the future proximity to the planned Gwangju Urban Railway Line 2 Beopwon Station within walking distance?a so-called 'station area' location. The future value of the area, expected to transform into a new residential zone with about 14,000 households, along with diverse community facilities like a fitness center and golf practice range, were also highlighted as advantages. However, these strengths were insufficient to overcome the chilly market sentiment and the high sales price barrier. The average sale price for the 84㎡ units was about 539 million won, which is evaluated to be over 100 million won higher than the local market price, raising concerns about poor sales even before subscriptions opened. Furthermore, the severe downturn in the Gwangju real estate market, which is recording the lowest subscription competition rates nationwide, is analyzed to have contributed to the poor performance.

With the first-priority subscription ending with results close to 'zero,' 276 units, accounting for about 95% of the total, will be carried over to the next priority round. The second-priority subscription will be held on July 30, and if the units remain unsold, the company is expected to make every effort to clear the inventory through subsequent discretionary supply. The announcement of the winners for Mudeungsan Gyeongnam Honorsville D1 is scheduled for August 6. The official contract period will be from August 18 to 20.