The Sharp Bundang Centro in Bundang District, Seongnam, Gyeonggi Province, which went on general pre-sale in Jan. The 84-square-meter unit, known as the standard national layout, approached 2.2 billion won, sparking a high-price controversy. Even so, 2,052 people applied for 40 units in first-priority subscriptions, posting a competition rate of 51.3 to 1, and the remaining special supply (44 units) also showed a competition rate of 15 to 1, drawing assessments that it was a box office success. However, once contracts began, about 60% of the winners—50 households—gave up their contracts, and it ultimately moved to a non-priority subscription.
It is unusual that more than half of the subscription winners gave up their contracts at a Bundang pre-sale complex, a core area of Gyeonggi Province. Bundang has strong access to Gangnam and is a highly preferred residential area, with home prices higher than in many parts of Seoul. Recently, there was even a transaction exceeding 1 billion won per pyeong (3.3 square meters). Even so, the rush of contract cancellations stems from soaring pre-sale prices coupled with loan regulations that make it difficult to raise cash. Experts predicted that the sorting of "the good from the bad" in the greater Seoul subscription market will intensify.
According to Korea Real Estate Board (REB) Subscription Home on the 23rd, The Sharp Bundang Centro will hold a non-priority subscription on the 24th. The supply is 50 units: 26 units of 84 square meters, 20 units of 78 square meters, two units of 73 square meters, one unit of 71 square meters, and one unit of 60 square meters. Eligible applicants are members of no-home households currently residing in the greater Seoul area, including Seoul, Gyeonggi, and Incheon. Winners will be announced on the 27th.
The Sharp Bundang Centro is a remodeled complex of Rainbow Village Complex 4 in Gumi-dong, Bundang, located a 15-minute walk from Ori Station on the Suin–Bundang Line. As a rare new-build complex in Bundang, it was expected to draw strong subscription interest, but many winners gave up their contracts. Even with a high competition rate in the main subscription, the wave of cancellations at the contract stage is largely due to the high pre-sale price. The pre-sale price at The Sharp Bundang Centro is 1.875 billion to 1.997 billion won for 78 square meters and 2.052 billion to 2.18 billion won for 84 square meters. Compared with Rainbow Village Complexes 3 and 5 nearby, where 84-square-meter units saw a transaction in Jan. at 1.498 billion won and 1.45 billion won, respectively, the pre-sale price is about 700 million won higher.
An official at a licensed real estate agency in Jeongja-dong, Bundang, said, "Although the area near Ori Station where Rainbow Village is located is administratively Bundang, its living area can be seen as Yongin, not Bundang," and added, "In Nov. last year, 'The Sharp Bundang Tier One' in Jeongja-dong had a top pre-sale price of 2.7 billion won for 84 square meters, yet subscriptions were a success. There was controversy over high prices then as well, but it appears the difference in location determined the outcome."
Loan regulations are also cited as a reason for the subscription flop. An official at a construction company said, "Considering that older apartments built in the 1990s in Jeongja and Sunae-dong, Bundang, are in the low 2 billion won range, the pre-sale price cannot be seen as that high," and added, "If it had been before the loan regulations, this result would not have happened." Through the Oct. 15 real estate measures last year, the government tightened rules so that for dwellings priced at 1.5 billion won or less, the maximum mortgage loan is 600 million won; for more than 1.5 billion won, 400 million won; and for more than 2.5 billion won, 200 million won.
The subscription market is expected to see clearer polarization this year. Nam Hyeok-woo at the Woori Bank real estate research institute said, "Since the subscription market is 100% end-user, the most important factor is capital," and added, "This year, competition will be fierce in mid-tier and top-tier locations with pre-sale prices of 1.5 billion won or less, but elsewhere, even in the greater Seoul area, there is a high risk of a wave of unsold units."