This year, a total of about 21,000 homes will be supplied at major redevelopment and reconstruction complexes across Seoul. Of these, about 5,700 will be offered for general sale. While fierce competition is expected in Gangnam-area complexes, analysts say a polarization will emerge as non-Gangnam areas see lower subscription competition due to heavier funding burdens from tighter subscription and lending rules.
According to the real estate industry on the 14th, this year's major planned sales complexes in Seoul (500 homes or more) number 13, totaling 21,480 homes. Excluding the portions for association members, 5,737 homes will be supplied to the general public. That accounts for about 26.7% of the total.
By district, Seocho has an overwhelming supply. Including THE H Clast, which is rebuilding Banpo Jugong Complex 1 zones 1, 2 and 4 in Banpo-dong (5,007 homes), and Bangbae Forest Xi, which is rebuilding Bangbae zones 13 and 14 in Bangbae-dong (2,296 homes), a total of 10,202 homes will be supplied across five complexes. The general-sale supply is 2,692 homes, meaning about 47% of the total general-sale volume is concentrated in Seocho.
Dongjak will also see 3,903 homes centered on the Heukseok and Noryangjin new towns, including ACRO Riversky, which redevelops Noryangjin New Town zone 8 (987 homes), THE H Kentro Nine, which redevelops Heukseok New Town zone 9 (1,536 homes), and Summit The Hill, which redevelops Heukseok New Town zone 11 (1,515 homes). Of these, 1,143 homes are slated for general sale.
In the case of the redevelopment of zone 10, the core of Jangwi New Town in Jangwi-dong, Seongbuk, more than half—1,031 out of a total 1,931 homes—will be released for general sale. Among Seoul's 13 major subscription complexes, it has the largest single-complex general-sale volume.
Bukhansan Mountain Signature Castle, which redevelops Galhyeon zone 1 in Galhyeon-dong, Eunpyeong (4,116 homes), does not lag Seocho in complex size, but general sale is limited to 555 homes, or about 13% of the total supply.
DE'FINE Yeonhui, which redevelops Yeonhui zone 1 in Yeonhui-dong, Seodaemun (959 homes), will release about 35% (332 homes) for general sale in the subscription market.
Experts cite tighter regulations under the Oct. 15 real estate measures as the biggest variable in Seoul's subscription market this year. As speculative overheated districts were expanded, subscription eligibility restrictions were strengthened.
Park Ji-min, head of Wol-yong Subscription Research Institute, said, "The number of Seoul subscribers this year will drop to about half compared with last year," and noted, "Competition rates will be halved and winning credit scores will also fall." Park said, "With household-member subscriptions banned and only heads of household allowed to subscribe, phantom demand such as duplicate subscriptions will be filtered out," adding, "Those with two or more homes also cannot subscribe, so the overall pool inevitably shrinks."
A more difficult funding environment is also a drag on the subscription market for Seoul apartments. With all of Seoul designated as speculative overheated districts, the loan-to-value (LTV) ratio is capped at 40%. While interim payments were generally eligible for loans up to the sixth installment, after the Oct. 15 real estate measures were announced, loans are allowed only up to the fourth installment.
Park said, "Before the Oct. 15 measures, having just 10% for the contract was less burdensome because the 60% interim payment could be financed, but after the measures, 20% of the 60% interim payment must be self-funded, so at least 30% of the sale price must be held in cash," and predicted, "More people will give up subscriptions due to funding burdens from lending limits."
Park added, "The Gangnam area will have steady demand regardless of the measures, but the rest of Seoul will visibly feel the impact of the rule changes," noting, "In particular, among non-Gangnam complexes, DE'FINE Yeonhui will be a test case as the first to face the new regulations after the Oct. 15 measures."