The premium (pi) prices for pre-sale rights and occupancy rights for new apartments are rising significantly. Transactions are being concluded at prices that exceed the initial sale price by as much as several hundred million won. This month, pre-sale rights with a premium of over 600 million won were traded in Jayang-dong, Gwangjin-gu, and occupancy rights contracts with a premium exceeding 1 billion won were also concluded in Daechi-dong, Gangnam-gu.
Most of the complexes with such high premiums were supplied at relatively low prices due to the application of the sale price ceiling system (bunsangje) about two years ago, or they are areas expected to increase in value in the future as nearby developments accelerate. Additionally, concerns about the shortage of apartment supply in Seoul and the surrounding metropolitan area have spread in the market, highlighting the scarcity of new apartments, which is analyzed as a reason for driving up the value of pre-sale and occupancy rights.
According to the Ministry of Land, Infrastructure and Transport on the 24th, occupancy rights for the 84.99 square meter (6th floor) 'D.H. Daechi Edellui' in Daechi-dong, Gangnam-gu, which is set for move-in on August 11, were traded for 3.6 billion won on the 14th. This apartment is a reconstruction of the 'Daechi-dong Guma Village 3 District' around Jeongja-dong, with subscriptions and contracts conducted in October 2024. The sale price for the 84.99 square meter unit was 2.207 billion won, as the sale price ceiling was applied at that time. In less than two years, it was traded at a price 1.3913 billion won higher than the sale price.
Park Ji-min, head of the Woryong Housing Subscription Research Institute, noted, 'It is a location where you can receive a premium for the school district due to the proximity of Whimoon High School and the Daechi-dong academy area, and considering the market prices of neighboring complexes such as Raemian Daechi Palace, it was expected to rise by over 1 billion won even from the time of the sale.'
The pre-sale rights for the 84.86 square meter (37th floor) 'Lotte Castle Eastfall' in Jayang-dong, Gwangjin-gu, which started moving in March of this year, also changed hands for 2.1 billion won on the 11th. Considering that the supply price (sale price) for the same unit size was 1.45 billion won at the time of the contract in August 2023, it means that a premium of 650 million won has been added in just over two years. This area was redeveloped by grouping the old telephone exchange site owned by KT, the Seoul Eastern District Court, and the Eastern District Prosecutor's Office site as the Jayang 1 District reorganization promotion area.
'Bokmun Central I-Park' in Bomun-dong, Seongbuk-gu, was also traded this month for a premium exceeding 100 million won. This apartment, for which the recruitment announcement was made in September 2023 and contracts were signed in October, is being developed in the area of 196-11, Bomun-dong 1-ga, Seongbuk-gu, with plans to move in by 2026. On July 16, a pre-sale right for a unit of 76.16 square meters was contracted for 1.26648 billion won, with a premium of 151.48 million won compared to the sale price of 1.115 billion won.
Experts expect that the demand for pre-sale and occupancy rights for new apartments will increase, even if it means paying a premium, amid concerns that the supply of newly built apartments in Seoul will continue to decrease. Kim Hak-ryeol, director of Smart Tube Real Estate Research Institute, said, 'The supply of new apartments in Seoul and the metropolitan area is decreasing, and the sale schedule is continuously delayed. The sale price is also increasing by over 10 million won every year,' adding, 'There will be more people who think that buying pre-sale rights at a premium is a way to purchase new apartments at a lower price.'
Jang So-hee, chief of asset management consulting at Shinhan Investment Corp., said, 'New apartments completed within five years in the metropolitan area account for only 12% of all apartments in the metropolitan area,' and added, 'If the reconstruction and redevelopment projects do not accelerate through revitalization, these new premiums will likely persist for a significant period.'