Seoul’s first-priority apartment subscriptions draw 65 to 1... “Presales = sellouts” trend spreads beyond Gangnam

[Financial News] This year, the average competition rate for first-priority apartment subscriptions in Seoul topped 65 to 1, reaching 15 times the national average.
According to an analysis released on the 30th by Real Estate R114 of data from the Korea Real Estate Board’s Cheongyak Home housing-subscription portal, the average first-priority competition rate for the 21 complexes offered for sale in Seoul from January through September this year was 65.05 to 1. That was about 10 times the average for the Seoul metropolitan area (6.28 to 1) during the same period and more than 40 times the rate in Gyeonggi Province (1.51 to 1). The national average was just 4.23 to 1.
The shift in where demand is concentrated is worth noting. Of the 21 complexes, the only projects in Seocho, Gangnam and Songpa districts were three in Seocho District. The general-sale units at 18 complexes in the other 10 districts accounted for just 2.6% of the nationwide total, but around 76,000 first-priority applicants flocked to them—22.4% of all such applicants nationwide and 54.5% of the Seoul total. The average competition rate at these complexes was 36.7 to 1, 14 times the average outside Seoul (2.6 to 1).
The contract results were also strong. Hauterre Banpo in Jamwon-dong, Seocho District, posted a first-priority competition rate of 710.2 to 1 and sold all 86 units offered in the general sale just over a week into the main contract period. Ichon Le El in Yongsan District also completed contracts for all 88 general-sale units in around two weeks. Jangwi Prugio Mark One in Seongbuk District, which offered 1,032 units for general sale—the largest such offering in Seoul this year—recorded a contract rate of about 96% during the main and wait-list contract stages, then sold the remaining units through non-priority contracts. D’Fine Yeonhui and Ssangyong The Platinum Seodaemun in Seodaemun District, Summit The Hill and Dongjak Central Dongmun The East in Dongjak District, and The Sharp Singil Central City and The Sharp Priella in Yeongdeungpo District also found buyers early.
An industry official said, “With supply shrinking in Seoul’s housing market, interest that had been concentrated in the three Gangnam districts is spreading to new homes outside Gangnam that offer access to the city center and everyday amenities. This is bringing to light pent-up demand across Seoul from people who have been waiting for new homes from established brands.”
The declining supply of newly built homes is underpinning the subscription boom. Ministry of Land, Infrastructure and Transport statistics show that 21,933 Seoul apartment units were completed from January through August this year, down 23.3% from 28,601 during the same period last year. A total of 49,973 Seoul apartment units were completed over the whole of last year.
Presale prices are also climbing steeply. An analysis by Real House, a specialist firm that evaluates apartment presale prices, of data from Cheongyak Home found that the average presale price last month for a private apartment in Seoul with an exclusive-use area of 84 square meters was ₩2,000,630,000, up 22.85% from ₩1,628,490,000 a year earlier.
The trends in the resale market vary by area. According to the Korea Real Estate Board’s weekly apartment price trends, Seoul apartment prices rose 0.09% in the fourth week of October (as of the 26th), extending their gains to 90 consecutive weeks and continuing the longest run on record. However, the increase was smaller than the previous week’s 0.13%, marking a second consecutive week of slowing growth. Prices continued to fall for a 12th week in Gangnam-gu (-0.38%) and Seocho District (-0.35%), and for an eighth week in Songpa District (-0.22%), while the 14 districts in Gangbuk rose 0.22%. The trend of resale prices weakening in the Gangnam area while rising outside it appears to be coinciding with the spread of subscription demand beyond Gangnam.
Presales will continue across Seoul through the end of the year. The biggest upcoming project is THE H Banpo 124, a redevelopment of Sections 1, 2 and 4 of Banpo Jugong Complex 1 by Hyundai Engineering and Construction. Of its 5,007 units, 1,801—930 special-supply units and 871 general-supply units—will be offered for sale. The schedule is reported to call for a notice inviting applications on November 27, special-supply applications on December 7 and first-priority applications on December 8. In the same neighborhood of Jamwon-dong, Hyundai Engineering will open a promotional showroom on the 30th and begin sales for THE H Shinbanpo Estera, a redevelopment of Shinbanpo 22nd Complex.
In Seocho-dong, LOTTE Engineering & Construction Co., Ltd. will launch Seocho LOTTE Castle Art Palace in November, with 835 units in total, including 146 for general sale. That same month, Hyosung Heavy Industries will offer Harrington Place Mullae, a 218-unit complex in the vicinity of 27-1 Mullae-dong 3-ga, Yeongdeungpo District, with every unit featuring an exclusive-use area of 84 square meters. Nearby are Mullae Station on Line 2; Yeongdeungpo Station, served by Line 1 and KTX; Yeongdeungpo-gu Office Station on Lines 2 and 5; and Yeongdeungpo Market Station on Line 5. HL D&I Halla will offer 135 of the 228 units at Gyeonghuigung Epite, redeveloped on the site of Donuimun District 2 in Gyonam-dong, Jongno District, for general sale in November. POSCO E&C will supply 308 residential-style officetel units at The Sharp First World Seoul, being built on the former site of Sangbong Bus Terminal in Sangbong-dong, Jungnang-gu. Including the 999 apartments already sold out, the project will have 1,307 units in total.

[email protected] Jeong Gyeong-su Reporter