This year, forecasts suggest that apartment sales in Seoul will decrease compared to last year. Among these, the application of the price ceiling system has raised concerns about a heated competition for subscriptions in the three Gangnam districts (Gangnam, Seocho, and Songpa) and a shortage of supply, with new sales expected to drop by 60%.
According to real estate R114 on the 8th, the planned apartment supply in Seoul this year is 21,719 units, an 18% decrease from last year's supply (26,484 units). Among these, the planned supply in the three Gangnam districts, including Gangnam, Seocho, and Songpa, is expected to be 4,896 units, a 60% decrease compared to last year (12,248 units).
Recently, among dwelling seekers, the preference for a 'solid single unit' and newly built properties has intensified, leading to high competition rates for new apartment complexes in the three Gangnam districts last year. The average subscription competition rate in Seoul last year was 154.5 to 1, marking the highest rate in three years since 2021 (164.13 to 1).
In such a situation, predictions of a significant decrease in supply compared to last year have drawn attention to the planned sales complexes. An official at A Realty Agency in Banpo-dong, Seocho-gu, said, "Since the beginning of the year, there have been inquiries from people interested in planned complexes like Raemian Trinawon (Banpo 1-3 Complex) and Banpo The H (Banpo 1-1-2-4 Complex)." They noted, "While high prices are expected, there’s anticipation that significant gains will eventually occur in Gangnam. There were complexes with unprecedented competition rates last year, and this year might see even higher competition rates in some complexes."
In response, experts expressed concerns over the heating competition for subscriptions in the Gangnam area. They also predicted that even less popular areas in Seoul would experience unsold units, exacerbating polarization within Seoul as demand concentrates in the three Gangnam districts.
Professor Ko Jun-seok from Yonsei University noted, "With the application of the price ceiling system, massive gains are expected, so competition here will likely be fiercer than in other areas where prices are set similarly to surrounding market rates." He also commented, "As the real estate market has cooled due to the recent economic recession, unsold units may appear in other regions of Seoul, leading to polarization between complexes subject to the price ceiling system and those that are not."
Some analysts have pointed out that a shortage of supply in the three Gangnam districts may impact the market more significantly than the heated competition for subscriptions. Yun Soo-min, a real estate specialist at NH Nonghyup Bank, stated, "While the likelihood of intensified competition rates exists, the significant increase in prices nationwide has created a high barrier to entry in the three Gangnam districts despite the application of the price ceiling system. The high prices will buffer against heated competition. However, issues such as ‘lotto subscriptions’, market polarization, and a shortage of dwellings in Gangnam are likely to have greater social impacts."
Professor Ko also mentioned, "The Gangnam area will suffer from chronic supply shortages for some time. The speed of reconstruction in areas like Apgujeong and Daechi-dong will be crucial. Until supply is achieved through reconstruction, the shortage will act as a factor driving price increases."