Dongjak District presale prices top those in the three Gangnam districts, yet developments sell out

[Financial News] This year, the average presale price per 3.3 square meters for apartments in Dongjak District edged past the three Gangnam districts. Redevelopment complexes in Heukseok and Noryangjin, where top prices for exclusive-use 84-square-meter units approached 3 billion won, also sold out one after another. With a string of “The H” branded complexes set to launch in Banpo and Jamwon by year-end, attention is focused on whether the strong demand for home subscriptions will continue.
According to the housing industry and Real Estate R114 on the 21st, the average presale price per 3.3 square meters in Dongjak District from January to September this year was 78.44 million won. That was 20,000 won higher than the average of 78.42 million won in Seocho, Gangnam and Songpa districts. In effect, Dongjak District had outpriced the three Gangnam districts, traditionally high-priced residential areas.
Judging by subscription results alone, the Gangnam area remains dominant. “ACRO Seocho” (formerly “ACRO de Seocho”), launched in Seocho District in April, drew 32,973 first-priority applicants, pushing the average competition ratio as high as 1,099 to 1. It set a record for private-sector apartment sales in Seoul. All 56 units offered for general sale sold out within six days of the start of contracts. That same month, “Hautierre Banpo” in Jamwon-dong received 30,540 first-priority applications, recording a competition ratio of 710.2 to 1, and all 86 units for general sale sold in a short time.
Dongjak District developments continued to sell out despite the burden of high presale prices. “Ra Klache Xi De Pine,” a redevelopment of Noryangjin District 6, has a top price of 2.2088 billion won for an exclusive-use 59-square-meter unit. That is more expensive than a unit of the same size at “Hautierre Banpo,” which launched around the same time. Even so, the average first-priority competition ratio was 26.9 to 1, and 367 of the 369 units offered for general sale were sold during the formal contract period. The remaining units also found buyers later.
“ACRO River Sky” in Noryangjin District 8 recorded a first-priority competition ratio of 19.9 to 1 despite setting the top price for an exclusive-use 84-square-meter unit at 2.7958 billion won. After contracts with reserve winners were completed, all general-sale units except three penthouses had sold, bringing the contract rate to about 99%. “Summit The Hill” in Heukseok District 11 had a top presale price of 2.9782 billion won for an 84-square-meter unit, but still recorded an average competition ratio of 32.5 to 1 in first-priority applications in May. A further 2,179 people applied in an unranked subscription for the three remaining units, and all units were ultimately contracted.
Under last year’s Oct. 15 real estate measures, the government lowered mortgage loan limits for homes in the Seoul metropolitan area and regulated areas to 400 million won for homes with market values over 1.5 billion won and up to 2.5 billion won, and 200 million won for homes valued over 2.5 billion won. Interim-payment loans were excluded from the reduced limits, but become subject to the restrictions when converted to final-balance loans. For a complex with a presale price close to 3 billion won, only a small portion of the final payment can be covered by a loan.
The remaining launches planned for this year are concentrated in Banpo and Jamwon. Hyundai Engineering and Construction plans to launch “The H Banpo 124” in November, a redevelopment of sections 1, 2 and 4 of Banpo Jugong Complex 1. The large-scale complex will have five basement levels and up to 35 floors above ground, with 50 buildings and 5,007 units in total. Of these, 1,832 will be offered for general sale, making it one of the year’s most anticipated offerings in the Gangnam area. The complex borders the Hangang River and will have extensive community facilities.
The complex was initially known as “The H Claest.” Citing remaining procedures, including approval of the management and disposition plan, the residents’ association said in April last year that it would postpone general sales until the first half of this year, but the actual schedule was pushed back further, to the second half. Industry observers expect prices to exceed 80 million won per 3.3 square meters, putting exclusive-use 84-square-meter units in the 3 billion to 3.2 billion won range. Of the 1,832 units offered for general sale, 1,358 are 84-square-meter units, accounting for about 74%.
Hyundai Engineering will launch “The H Sinbanpo Estera” this month, a redevelopment of Sinbanpo Complex 22 in Jamwon-dong. The complex will comprise two buildings, with three basement levels and up to 35 floors above ground, and a total of 160 units. Only 28 units, all with an exclusive-use area of 84 square meters, will be offered for general sale. Jamwon Station on Seoul Subway Line 3, Banpo Station on Line 7 and Express Bus Terminal Station are nearby. Shinsegae Department Store’s Gangnam branch, The Catholic University of Korea, Seoul St. Mary’s Hospital, and Banpo Hangang Park are also close by; nearby schools include Banwon Elementary, Gyeongwon Middle and Cheongdam High.
Industry observers believe that as construction and land costs rise and presale prices continue to climb, demand has strengthened among buyers seeking to secure new apartments with good locations and reputable brands before prices rise further. A real estate expert said, “The fact that new apartments in key locations across Seoul have been selling out one after another despite rising presale prices shows just how solid demand is. With presale prices for developments coming to market likely to rise further due to higher construction and land costs, the trend of trying to secure new apartments with excellent locations and brands early is expected to continue.”
[email protected] Jung Kyung-soo Reporter