Capital-region apartment presale prices up 25.7% in a year; standard-size units nearing 3 billion won

[Financial News] A year ago, the average presale price per square meter for private apartments in the capital region was around 8.71 million won. It has now exceeded 10.95 million won. Prices rose 25.7%, and the increase in Seoul reached 38.0%.
On the 4th, according to the Korea Housing & Urban Guarantee Corporation (HUG)'s report on private-apartment presale market trends, as of the end of September the average presale price per square meter in the capital region was 10,959,000 won, up 2,242,000 won from 8,717,000 won a year earlier. In Seoul, it rose by 5,239,000 won over the same period, from 13,779,000 won to 19,018,000 won.
The era of 2-billion-won presale prices for so-called “national standard-size” apartments is spreading beyond Seoul into the capital region. In Seoul, 84-square-meter units at Seobanpo Summit The Hill, offered for sale in Dongjak District last May, were priced in the 2.9-billion-won range, while Acro River Sky units were in the 2.7-billion-won range. The 84-square-meter units at The Sharp Bundang Highist, offered for sale in Bundang District in September, were priced at 2.7 billion to 2.9 billion won, approaching 3 billion won. The top presale price for an 84-square-meter unit at THE H Adelstar in Gwacheon, Gyeonggi Province, which accepted applications in August last year, was also in the 2.4-billion-won range.
Construction costs are driving presale prices higher. According to the Construction Economy Research Institute of Korea, the Construction Cost Index stood at 138.74 in August, up 6.0% in a year. Analysts say upward pressure has intensified further since the Ministry of Land, Infrastructure and Transport (MOLIT) announced a 4.07% increase in standard construction costs in September, a benchmark for setting presale prices at complexes subject to the price ceiling system.
The decline in new-apartment supply is also spurring demand. MOLIT statistics show that 80,075 housing units were completed in the capital region from January through August this year, down 21.6% from a year earlier; in Seoul, completions fell 19.1% to 25,630 units. Industry insiders say fears that “prices will be higher if you don’t buy now” are fueling demand for presale subscriptions. In Seoul, Hauterre Banpo (an average of 710.23 applicants per unit), Ichon Le El (134.97 to 1) and Dongjak Central Dongmun The East (114.79 to 1) all sold out with three-digit competition ratios. Large numbers of applicants also flocked to projects in Gyeonggi Province and Incheon, including Anyang Everfore Nature & e-Pyeonhansesang (57.1 to 1), The Sharp Bundang Centro (51.3 to 1) and The Sharp Songdo Granterre (50.03 to 1 for Block G5-6).
An industry official said, “With construction costs rising as supply declines, the market is structured in a way that makes it difficult for presale prices to come down easily,” adding, “The higher presale prices go, the more demand will concentrate on complexes with good locations and quality offerings.”
However, the market is not moving uniformly in one direction. According to MOLIT, unsold homes in Seoul totaled 996 at the end of September, up 98 from a month earlier. Nationwide, unsold homes fell 4.6% over the same period to 65,941. In the resale market, Korea Real Estate Board figures for the fourth week of October show apartment prices in Gangnam and Seocho districts falling for 12 consecutive weeks, while prices in Seoul’s 14 northern districts rose 0.22%, underscoring the stark regional differences.
Major presale launches will continue in Seoul and the capital region through the end of the year. Hyundai Engineering and Construction will launch THE H Banpo 124 this month, a redevelopment of sectors 1, 2 and 4 of Banpo Jugong Complex 1 in Banpo-dong, Seocho District. It is reportedly set to publish a resident recruitment notice on the 27th and accept presale applications in December. LOTTE Engineering & Construction will offer Seocho Lotte Castle Art Palace in Seocho-dong, while POSCO E&C will supply 308 officetel units this month at The Sharp First World Seoul, on the former site of the Sangbong bus terminal in Sangbong-dong, Jungnang-gu. Hyosung Heavy Industries will sell Harrington Place Mullae in Mullae-dong 3-ga, Yeongdeungpo District, a 29-story building with three basement levels and 218 units, all with an exclusive area of 84 square meters. In Gyeonggi Province, Gyeryong Construction will offer 338 units at ELIF Siheung The Prime in Block B-5 of the Siheung Geomo District, including 304 for general sale. Hanwha Corporation E&C Division will present Hanwha Forena Jije Station in Segyo-dong, Pyeongtaek, with 1,098 units measuring 84 or 116 square meters. In Uijeongbu, Uijeongbu Station Felis Tower Yangwoo Naeanae, comprising 1,252 apartments and 48 officetel units, will offer 414 apartments for general sale.
[email protected] Jeong Gyeong-su Reporter