The Shop Songpa Lumistaar (Garak Hyundai 5th) in Garak-dong, Songpa District, Seoul, is putting its reserved dwellings on the market at prices up to 10% below the general presale price. Reserved dwellings are homes that a reconstruction or redevelopment association holds back from sale in case of contingencies. Recently, with lending regulations making it difficult to raise hundreds of millions of won in a short time, more places have begun selling at a discount, but attention is focusing on the fact that these are rare new units in Songpa District. The base supply prices are also 200 million to 400 million won below market levels.
According to the maintenance industry on the 13th, the small-scale reconstruction maintenance project association for Garak Hyundai 5th Apartment issued a notice the previous day to sell five reserved units at The Shop Songpa Lumista. The base supply prices and quantities are 1 unit each at 1.8 billion won for 59 square meters of exclusive area, 1.98 billion won for 74 square meters, and 2.08 billion won for 84 square meters, and 2 units at 2.294 billion won for 99 square meters. Bidding runs from today through the 22nd. The sale of reserved units is conducted through competitive bidding, not a point system or lottery, with the highest bid at or above the base price winning.
The base prices are 1% to 11% lower than the initial presale prices. At the time, the average presale price was 65 million won per 3.3 square meters (1 pyeong), with 20.03 billion won for 74 square meters of exclusive area, 2.231 billion to 2.286 billion won for 84 square meters, and 2.554 billion to 2.584 billion won for 99 square meters. Only the 59 square meters base price is about 100 million won higher than its presale price (1.668 billion to 1.695 billion won).
The Shop Songpa Lumista is a small complex of 179 total units, built anew after tearing down Garak Hyundai 5th. In 2022, it avoided the price cap on presales, directly reflecting nearby market prices, which sparked controversy over high presale prices and led to unsold units. In the end, 1 year and 5 months later, the remaining inventory was all disposed of after cutting the price by 20% from the presale price.
But the situation flipped quickly. As apartment prices in Seoul climbed steeply last year, the reserved unit prices are now seen as cheaper than market levels. Raemian Park Palace (completed in 2007; 919 units), the complex right next to The Shop Songpa Lumista, saw an 84-square-meter exclusive unit close for 2.25 billion won in Nov. last year. Asking prices are 2.35 billion to 2.4 billion won. At Garak Samik Mansion (1984; 936 units), a 108-square-meter unit had a transaction at 2.69 billion won last month.
Songpa District is where the rise in home prices is particularly pronounced. According to the Korea Real Estate Board (REB), last year the apartment price increase rate in Seoul's Songpa District was 20.92%, the highest among the 25 districts. The average increase rate for all apartments in Seoul last year was 8.71%.
An official at a certified real estate agency in Bangi-dong, Songpa District, said, "Although The Shop Songpa Lumista is a small complex, considering it is a new apartment in Songpa District scheduled for move-in in June this year, the reserved units' base prices are low compared with market levels," and noted, "The voluntary supply application competition rate shows that bidding competition will be intense." The voluntary supply competition rate for one 99-square-meter exclusive unit (a canceled contract unit) conducted on the 8th to 9th recorded 2,482 to 1. The application presale price was 2.45 billion won, about 150 million won higher than the reserved units' base price.