This year, the trend of concentration in the housing application market has become more pronounced in Seoul. While nearly half of the nationwide applicants flocked to the general supply in Seoul, which accounts for less than 4% of the total supply, Gyeonggi Province, despite being part of the metropolitan area, saw an average competition rate below 2:1. Analysts suggest that the risk of applications for housing projects in the outskirts of Gyeonggi may increase in the second half of the year.
According to the Korea Real Estate Agency's application home data released on July 13, the number of first-choice applicants nationwide in the first half of the year totaled 283,619. Among them, 128,137 applicants were from Seoul, making up 45.2% of the total.
The supply volume was limited. The general supply in Seoul was only 2,016 units, which is just 3.8% of the nationwide general supply of 52,963 units. This means that nearly half of the nationwide applicants concentrated on less than 4% of the available units. The average competition rate for first-choice applications in Seoul during the first half of the year was 63.56:1, nearly 12 times the national average of 5.36:1.
In contrast, Gyeonggi Province had 29,335 applicants for 15,626 units, resulting in an average competition rate of just 1.88:1. Although the supply volume was more than seven times greater than that of Seoul, the number of applicants remained at only a quarter of Seoul's figures. Incheon, also part of the metropolitan area, had 3,978 applicants for 4,436 units, achieving an average competition rate of 8.11:1.
This shift indicates that the housing application market is no longer simply divided between the metropolitan area and the provinces. Demand has concentrated in Seoul due to the scarcity of new constructions and expectations of price gains in areas subject to price cap regulations. However, projects in the outskirts of Gyeonggi are increasingly failing to attract buyers, despite being located in the metropolitan area.
The challenges facing the outskirts of Gyeonggi include an imbalance between pricing and location. In the past, lower prices compared to Seoul were seen as an advantage, but recent increases in construction and land costs have diminished this appeal. Developments lacking clear accessibility to Seoul, proximity to workplaces, or essential infrastructure are losing their status as 'alternatives to Seoul.'
A representative from a construction company stated, "Projects in the outskirts of Gyeonggi are expected to have high land costs and pricing due to their location in the metropolitan area, but they do not automatically attract application demand like those in Seoul. The burden of marketing and financing costs is increasing, while they also face the risk of under-subscription, similar to provincial projects."
In the provinces, the trend of under-subscription has become more evident. In Gangwon, the average competition rate was 0.30:1, in Busan it was 0.33:1, in Jeju it was 0.46:1, and in Jeollanam-do it was 0.58:1, all failing to reach an average of 1:1 for first-choice applications.
Industry insiders noted, "While development prospects, such as semiconductor clusters in the Honam region, have improved application demand in some areas, the overall average competition rate in the provinces remains low. The gap between Seoul, preferred areas in the metropolitan region, and smaller cities in the provinces is widening further."
* This article has been translated by AI.
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