"It was very popular as the flagship complex of Gwangmyeong New Town, but after the Oct. 15 measures were announced, we've been getting a lot of calls about regulations. Quite a few people give up after hearing the explanation," said an official at A Real Estate Agency in Gwangmyeong-dong, Gwangmyeong, Gyeonggi.
On the 3rd in the afternoon, after coming out of exit 1 of Gwangmyeongsageori Station on Line No. 7 and entering the alley, the fence of the redevelopment construction site for Zone 11R of Gwangmyeong New Town in Gwangmyeong, Gyeonggi, came into view. It is a large complex with more than 4,000 households, and it took more than 20 minutes to walk around the entire fence.
The site is the construction site for "Hillstate Gwangmyeong 11 (tentative name)," built by Hyundai E&C. The complex will consist of 25 buildings with 5 underground floors to a maximum of 42 above-ground floors, totaling 4,291 households. Of these, 652 households are slated for general sale.
The location is a station-area complex close to Gwangmyeongsageori Station on Line No. 7. With 4,291 households, it is the largest offering within Gwangmyeong New Town. In terms of scale and location, it looked fit to be called the flagship complex of Gwangmyeong New Town. If the GTX-B line (planned) connects to Bucheon Stadium Station, accessibility to all of Seoul and the greater capital area is also expected to improve.
Around the construction site, there are many low-rise commercial buildings and the roads felt somewhat narrow, but it is also a location where residents can enjoy various living infrastructure centered on Gwangmyeongsageori Station nearby. In fact, a movie theater and a large discount store were located not far from the complex.
However, the presale price was set high at 45 million won per 3.3 square meters (pyeong). Given that the average presale price per pyeong for private apartments in Seoul is 45,511,000 won, based on the Korea Housing & Urban Guarantee Corporation (HUG) trend report on private apartment presale prices, it is priced at a level similar to Seoul. For the standard 84 square meters exclusive area favored by many, it is in the 1.5 billion won range. "Cheolsan Station Xi," which went on sale last month, was priced at an average of 42.5 million won per pyeong and also drew controversy over high pricing at the time, but it performed well with a high subscription competition rate.
Still, there are concerns that overall transactions in Gwangmyeong have stagnated since the Oct. 15 measures were announced, which could have an impact. Under the Oct. 15 measures, all of Seoul and 12 areas in Gyeonggi Province were designated as adjustment targets, speculative overheating districts, and land transaction permit zones, and Gwangmyeong was included.
In the newly designated areas, the loan-to-value ratio (LTV) for home mortgage loans is reduced from 70% to 40%. This means borrowers can take out loans only up to 40% of the home price. The government said that for dwellings priced at 1.5 billion won or less, borrowers can still receive up to 600 million won in mortgage loans under the current rules, but in areas designated as regulated area, the 40% LTV applies, so even apartments priced at 1.5 billion won or less cannot qualify for a 600 million won loan. With these regulations making it harder to raise funds, the view is that high-priced complexes like Hillstate Gwangmyeong 11 could struggle.
An official at B Real Estate Agency in Gwangmyeong-dong said, "Transactions have completely stopped due to the regulations. With no transactions, not only residents in regulated areas but real estate agencies are all in a tough spot," adding, "Hillstate Gwangmyeong 11 is the last presale complex in Gwangmyeong New Town and has the best location, so many people had been waiting for it, but due to the regulatory impact, the competition rate could be weaker than Cheolsan Station Xi."
An official at C Real Estate Agency in Gwangmyeong-dong said, "Because this is the last presale in Gwangmyeong New Town, there will be virtually no new supply in Gwangmyeong for a while. However, the results of this presale will affect the performance of subscription complexes that come out later within regulated areas," adding, "As for transactions stopping right away, I heard that the situation is similar in other regulated areas."
Experts also said the location is excellent but predicted there will be an impact from the regulations. Park Ji-min, head of Wol-yong Subscription Research Institute, said, "Compared with Cheolsan Station Xi, which succeeded earlier, this complex is larger and many favored units remain among those offered for general sale," adding, "However, as the market has slumped due to the regulations, the subscription performance could struggle."