'Since the 6·27 mortgage regulations, the real estate sentiment has frozen, causing a cooling atmosphere in the metropolitan area's allocation market. Even apartments that sold out during the initial allocation due to expectations of price appreciation are now seeing cases where contracts are canceled after the mortgage regulations, leading to first-come, first-served allocations in some places. In certain areas, some prospective buyers who are struggling to secure funds are attempting to sell their allocation rights with a 'minus premium' (mafi).
According to the allocation industry on the 26th, Eunpyeong Hillstate Medialley in Eunpyeong District, Seoul, has recently started first-come, first-served sales for some units of the 74㎡ type.
Eunpyeong Hillstate Medialley successfully sold out during its initial allocation. However, due to the selling price of about 45 million won per pyeong, successful applicants felt burdened and many canceled their contracts. The atmosphere changed as house prices in Seoul turned upward during the first half of this year. The competitive ratio reached an average of 11.43 to 1 in the unassigned allocation conducted on the 24th of last month, leading to a successful allocation boost.
However, after the government announced on the 3rd a mortgage regulation that limits loan amounts to 600 million won and prohibits conditional lease loans on ownership transfers, the situation reversed again. Concerns that house price increases could be restricted led to some lower-floor properties returning to the market, resulting in first-come, first-served allocations. Units of 51㎡ and 59㎡ sold out, while some 74㎡ units remain.
Park Ji-min, head of Wol Yong Allocation Research Institute, noted, 'Eunpyeong Hillstate Medialley was affected by the psychological impact of the mortgage regulations, and it was expected to sell out through the unassigned allocation. However, as the real estate market shrank following the announcement of mortgage regulations, units became available for contracts. Nevertheless, it is expected that allocations will be completed within this year.'
The allocation market in the outskirts of the metropolitan area, where selling prices are relatively lower, is also being affected. Although loans can be executed within the 600 million won limit due to lower selling prices than in Seoul, the overall decline in real estate transactions may reduce allocation demand.
A contractor who purchased unsold quantities of an apartment scheduled to be completed in 2028 in the outskirts of the metropolitan area said, 'I contracted because I thought the selling price would continue to rise, but the atmosphere has changed significantly since the mortgage regulations. I'm worried that the price of nearby five-year-old apartments might drop further, making me wonder if I should cancel the contract even if it means losing part of the deposit.'
'Properties with a minus premium are also appearing in increasing numbers. It seems that quantities that were supposed to secure funds through loans or leases upon moving in are now being released into the market, as the tightened mortgage regulations have caused issues in financing. Allocation rights for the 84㎡ unit of Hanwha Foreena Mia scheduled to be occupied in November are listed with a premium of 50 million to 60 million won at an asking price of over 1.1 billion won. In the case of the 84㎡ unit of Dobong Geumho Uljin River Park in Dobong District, Seoul, there are listings either with no premium or a premium of 40 million won offered as a quick sale.
As the government's real estate regulations continue, it is expected that, depending on the location and price, it will be difficult for the overall allocation market atmosphere to revitalize for the time being.
Kim Hyo-sun, a real estate expert at NH Nonghyup Bank, stated, 'Depending on the location and price, there are many existing properties emerging, and there is an expectation that housing price adjustments may occur, so more people are trying to carefully assess whether there are long-term benefits to taking allocations. When they think the prices are comparable to the surrounding market or that the location is relatively poor, situations arise where they postpone their applications.'
Furthermore, Specialist Kim explained, 'Especially in areas where the selling price limit system does not apply, there's a greater likelihood that the property's attractiveness will be low compared to the nearby existing apartments. In such cases, there's a high possibility that allocations will fall short or that they will have a premium.'
There is also an opinion that even if mortgage regulations do not directly apply, the allocation market could stagnate. Park noted, 'If you receive a loan of up to 600 million won, which is 50% of the selling price and the maximum loan limit, you could see the allocation reach 1.2 billion won. Therefore, Seoul's market could stagnate.'
While Park noted, 'Although the selling prices in the outskirts of the metropolitan area are lower and not directly related to the mortgage regulations, the adverse sentiment could still impact the allocation market.'