Urban lifestyle dwellings near the Jungmun Tourist Complex in Jeju were put up for public auction at around 20 million won per unit. Fifteen units are being auctioned at once. When they were sold in 2016, the development was promoted as an income-generating property adjacent to the Jungmun Tourist Complex that could enjoy a premium from projects such as a new airport, and units of 5 to 8 pyeong based on net floor area were sold for close to 100 million to 200 million won. Ten years later, they are being dumped in bulk public auctions.
On the 6th, according to the sales industry and the Korea Housing & Urban Guarantee Corporation (HUG), 15 units of "Samsung Homestay" in Seogwipo, Jeju, are being put up for public auction. The properties are part of an urban lifestyle dwelling complex of 162 units in total, located at 2367-1, Jungmun-dong, Seogwipo, Jeju. Urban lifestyle dwellings are dwellings with relaxed construction and auxiliary facility standards to increase the supply of small homes for one- to two-person households, and they are usually configured in small sizes.
The complex was built on a land area of 1,406.0 square meters (about 425.31 pyeong), with a total floor area of 7,106.25 square meters (about 2,149.64 pyeong), two basement levels to seven above-ground floors, in one building. Hamil was the developer, and Samsung Home E&C handled construction. It was sold in five types ranging from a net floor area of 17.14 square meters (about 5.18 pyeong) to 26.59 square meters (about 8.04 pyeong), with list prices from a minimum of 122.5 million won to a maximum of 192.3 million won.
The developer took out a loan using the 15 unsold units as collateral, and in this process HUG issued a guarantee for the loan. In Dec. 2024, however, a guarantee accident occurred when the developer failed to repay principal and interest on the loan, and HUG repaid the principal and interest in its place and then began a public auction of the 15 collateralized units in Mar. last year. The first round of auctions failed to attract buyers five times, and the second round has been underway since last month. The minimum sale price for all 15 units is 379.9 million won. The sale is being pushed at around 25 million won per unit. That is about one-seventh of the original list price. An industry official said, "The public auction has been underway since last year, but repeated failures have pushed the price down."
What allowed urban lifestyle dwellings, essentially close to studio apartments, to be sold at prices in the hundreds of millions of won at the time was expectations for the Jungmun Tourist Complex and plans to build a new Jeju airport nearby. Sales agencies then promoted them as "premium revenue single houses," touting development catalysts and proximity to the Jungmun Tourist Complex.
The bulk auctions are seen as influenced by the narrow net floor areas and a slump in the urban lifestyle dwelling market due to restrictions on owners of multiple homes. A representative of a Jungmun-dong real estate office said, "I understand that issues with the overall building structure and views reduced buyer preference," adding, "There were problems from the initial sales phase, and this eventually led to large-scale public auctions." Another real estate office representative also said, "I understand that the excessively narrow net floor plans caused the unsold inventory."
Lee Eun-hyung, a research fellow at the Korea Institute of Construction Policy Studies, said, "In Jeju, urban lifestyle dwellings are purchased to earn rental revenue, but as the local real estate market cooled, rental demand fell and the unsold units were not cleared," adding, "In particular, because urban lifestyle dwellings are counted toward the number of dwellings owned, sales are expected to become even more difficult during periods like now when restrictions on multiple-home owners are tightening."