"You Won't Get This Price Later"... Crowds Rush In as Jamsil Reuel Reserved Units Sell Out [Real Estate AtoZ]

Around 40 bidders, 4-to-1 competition ratio
Retained units exempt from land permission zone regulations
No owner-occupation requirement, can be used for jeonse rentals

All 10 reserved units at 'Jamsil Reuel' in Songpa-gu, Seoul, offered by the Jamsil Miseong Clover reconstruction association, were sold in the first auction without a single failure. Even though the association set the reserve price about 5% higher than the appraised value, around 40 bidders participated, resulting in an average competition rate of 4 to 1.

According to Lotte Construction on the 13th, the association sold three units of 59㎡B and seven units of 74㎡B exclusive area through a highest-price open competitive bidding process. The reserve price for the 59㎡ units ranged from 2.908 billion to 2.992 billion won, and for the 74㎡ units from 3.318 billion to 3.533 billion won. Bidding closed on the 11th, and the successful bidders were confirmed on the 12th.

Reserved units are the remaining inventory that a reconstruction association withholds from general pre-sales to prepare for contingencies such as disputes over association membership eligibility, and then sells at the final stage of the project through highest-price bidding.

Sky Bridge at 'Jamsil Reuel', Songpa-gu, Seoul. Lotte Construction

The reason these reserved units drew attention was their price competitiveness compared with the prevailing market prices. In November last year, a move-in right for a 74㎡ exclusive unit at Jamsil Reuel was traded at 3.8 billion won, meaning the reserve prices for the reserved units were 300 million to 500 million won lower than the actual transaction price.

Another factor that attracted demand is that, under the Act on Report on Real Estate Transactions, etc., reserved units are not subject to regulations on land transaction permit zones, so they can be purchased regardless of the number of homes already owned.

However, analysts noted that the competition was effectively limited to high-net-worth individuals, because loan regulations require buyers to raise several billions of won in cash within a short period. Successful bidders must first pay 20% of the winning bid as a down payment, and the remaining 80% balance must be paid within the designated move-in period. The contract process will take place from the 25th to the 27th of this month.

Lotte Construction is building a high-end brand belt along the Han River that connects Banpo, Cheongdam, Jamsil, and Yongsan. Based on the strong demand shown for Jamsil Reuel this time, the company plans to continue winning redevelopment and reconstruction projects in key areas such as the Seongsu District 4 zone.