"They Said It Was Too Expensive": All Standard Units at Gwangmyeong's 1.5 Billion Won Apartments Sold Out [Real Estate AtoZ]

Gwangmyeong’s Highest-Ever Pre-Sale Price Apartment Sells Out All Units
Sold Just Before October 15 Policy... Not Subject to Stricter Loan Regulations
Gwangmyeong Real Estate Market Rebounds After “Balloon Effect”
Industry: “Subscription Mo

Cheolsan Station Xi (Gwangmyeong 12R District), developed by GS Engineering & Construction in Cheolsan-dong, Gwangmyeong, has completed contracts for all units just over a month after the subscription process. The complex drew attention for its high sales price, with the price for an exclusive 84㎡ unit set in the 1.5 billion won range, sparking controversy over high pre-sale prices. While the main reason for the rapid sell-out appears to be that it was exempt from the government’s October 15 real estate policy regulations, some analysts say it also signals a revival of the Gwangmyeong real estate market, which had been sluggish for some time due to a ‘supply glut.’

Cheolsan Station Xi Perspective. GS Engineering & Construction.

On November 11, the Cheolsan Station Xi sales website posted an announcement stating, “100% Sold Out. Thank you for your support.” The official contract period took place from October 27 to 29, and it was reported that contracts were finalized early among the initial numbers of the standby winners list (five times the supply volume).

Despite controversy over high pre-sale prices, the subscription results told a different story. Cheolsan Station Xi is a redevelopment project in the Gwangmyeong 12R District, consisting of 2,045 units in total, spanning from 7 basement floors to 29 above-ground floors. Of these, 650 units were offered for general sale. In the first-round subscription last month for 313 units, 11,880 applicants competed, resulting in an average competition ratio of 38 to 1. The sales price was 42.5 million won per 3.3㎡, with exclusive 84㎡ units priced between 1.515 billion and 1.576 billion won, marking the highest price ever in Gwangmyeong. This was about 200 million won higher than the surrounding market prices.

Even with high subscription competition, it can take several months to sell out if many people forfeit their contracts. However, this complex was highlighted for being exempt from regulations because it was sold before the October 15 real estate policy was implemented, resulting in a rapid sell-out. With the policy in effect, Gwangmyeong has been classified as a regulated area, a speculative overheating district, and a land transaction permission zone-subject to triple regulation. The loan-to-value (LTV) ratio was reduced from 70% to 40%. Other regulations were also strengthened, including a restriction on re-winning subscriptions (up to 10 years) and a three-year resale restriction on pre-sale rights.

Yang Jiyeong, a senior advisor at Shinhan Premier Pathfinder, said, “As the policy was announced during the contract period, the fact that this is a newly built property in the Seoul metropolitan area not subject to the new regulations became even more prominent. The decisive reason for the high actual contract rate and the lack of contract cancellations was the regulatory environment,” she explained. She added, “The recovery of the Gwangmyeong apartment market also contributed to the strong sales.”

100% Sold Out Announcement for Cheolsan Station Xi. Cheolsan Station Xi Website.

The Gwangmyeong real estate market remained sluggish until the first half of this year. The number of new move-in units was 4,395 last year and 9,346 this year, far exceeding the appropriate demand of 1,450 units, creating a significant supply burden. In some complexes, negative premium (so-called ‘mafi’) listings also appeared. For example, the pre-sale right for an 84㎡ unit at Trius Gwangmyeong was traded at a price 50 million won lower than the original sale price.

The Gwangmyeong real estate market began to rebound after the June 27 lending regulation, which limited housing mortgage loans in the Seoul metropolitan area to 600 million won. According to the Korea Real Estate Board, Gwangmyeong apartment prices ranked 157th out of 178 cities, counties, and districts nationwide, with a cumulative change of -2.17% over the 24 weeks before the June 27 regulation. However, in the 18 weeks since, prices have risen by 4.90%, ranking 12th nationwide and 4th in Gyeonggi Province. The cumulative increase for this year is 2.63%. The area is notable for its abundance of new construction in the metropolitan area, and its locational advantages have been highlighted again, with seven new railway lines, including the planned Shinansan Line and Wolgot-Pangyo Line, scheduled for construction.

Experts predict that Gwangmyeong’s popularity will continue. An industry insider said, “In regulated areas, it is difficult to find properties for general transactions as listings disappear, and buyers must prepare large sums of money at once. In contrast, if you win a subscription, you can divide the payment into a contract deposit, interim payment, and balance over two to three years, making it a much more attractive home-buying option in the current environment.” He added, “Even if future projects do not match the success of Cheolsan Station Xi, there should be no issue selling standard-sized apartments in Gwangmyeong at prices in the 1.5 billion won range.”