Some apartments in Seoul are experiencing repeated recruitment efforts despite recording double-digit subscription competition rates. Smaller units are priced between 700 million and 800 million won, with some requiring a 40% payment of the purchase price within a month of winning the lottery. While many applicants show interest during the subscription phase, actual contracts are influenced by the price, financing conditions, and product appeal, leading to a disconnect between competition rates and sales.
According to the Korea Real Estate Agency's subscription home page, the Cheonggye Norway Forest in Hwanghak-dong, Jung-gu, conducted its 13th round of unsold unit subscriptions on October 20, targeting 10 units with a dedicated area of 39 square meters.
This complex had previously attracted a significant number of applicants. In the 12th round, 149 people applied for 13 units, resulting in an average competition rate of 11.46 to 1. In the 11th round, 446 applicants vied for 13 units, pushing the competition rate to 34.3 to 1. However, leftover units led to the continuation of recruitment into the 13th round.
The price and payment schedule for Cheonggye Norway Forest may also pose challenges. The highest price for the 39-square-meter units is set at 761.12 million won. According to the 13th recruitment announcement, winners must pay a 10% deposit and 30% of the price in one to three installments within 30 days of the contract date, requiring 40% of the purchase price to be secured within a month.
Based on the highest price, this amounts to approximately 304.45 million won. If the mid-term loan is not executed within the specified period or if the loan limit is lower than expected, the buyer must secure additional funds.
Harrington Place Nowon in Nowon-gu is experiencing a similar trend. In its second round of voluntary supply, 203 applications were received for 15 units, resulting in an average competition rate of 13.53 to 1. However, 13 units are being offered again in the third round. The highest price for the 59-square-meter units is around 865 million won.
In Gangbuk-gu, The Richmond Mia also offered 16 units in its second round of voluntary supply this month, with the highest price for the 49-square-meter units set at 802 million won. All three complexes have relatively small areas, but their highest prices range from 700 million to 800 million won, placing a significant financial burden on actual buyers.
Ham Young-jin, head of the real estate research lab at Woori Bank, analyzed, "As the total purchase price burden increases, actual buyers are likely to abandon 'national standard' subscriptions in favor of smaller units, while asset holders will gravitate toward larger units with high scarcity, indicating a polarization trend that is expected to continue for the time being."
However, as recruitment efforts continue, the remaining supply is decreasing. Harrington Place Nowon saw its re-supply peak at 58 units, which has since dropped to 17, then 15, and now 13. The Richmond Mia also saw its supply decrease from 98 units in June to 31 in September and 16 this month.
The reduction in remaining supply does not indicate a halt in contracts. However, the ongoing re-supply following double-digit competition rates makes it difficult to gauge sales solely based on competition rates. The re-supply may include contract cancellations, disqualified winners, or contract terminations.
Product appeal is also a variable. If less desirable units remain after repeated recruitment or if the price competitiveness compared to existing nearby apartments is insufficient, winners may hesitate to finalize contracts.
A real estate agent near Harrington Place Nowon stated, "While being a newly built property in a prime location is advantageous, considering the product appeal, it should be approached primarily for actual residence. It may not be suitable for investment purposes aimed at future profits or value appreciation."
* This article has been translated by AI.
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