As move-ins to THE H Bangbae, rebuilt from the Bangbae 5 district in Seocho-gu, Seoul, are three months away, attention is turning to the Gangnam-area jeonse and monthly rent market. The complex is a rare supply in Gangnam, where jeonse and monthly rental listings are scarce, and is a new large complex with more than 3,000 households. Because neither association members nor general sale buyers have an owner-occupancy requirement, the so-called "move-in market" effect is also expected, with jeonse and monthly rental listings hitting the market all at once early in the move-in period.
According to the maintenance industry and Naver Real Estate on the 25th, as of the previous day THE H Bangbae had 1,739 jeonse listings and 1,379 monthly rent listings. The complex is being built at 946-8 Bangbae-dong, Seocho-gu, Seoul, with 29 buildings from four basement levels to up to 33 floors above ground, totaling 3,064 households. Hyundai Engineering & Construction built it, and after a pre-inspection for occupants from July 11 to 13, move-ins are scheduled to begin in September.
The current number of listed jeonse and monthly rent properties exceeds the total number of households in the complex. However, because the same listing can be registered redundantly by multiple brokerages on real estate platforms, the actual rentable supply is likely smaller than this.
The market is expecting a stabilizing effect on jeonse prices early in the move-in period. For two to three months around the move-in to a new apartment, jeonse and monthly rent transactions often become active as homeowners seek to raise the final payment and successful buyers (those who received allocations) look to lease out. In particular, recent Gangnam areas lack new jeonse supply, leading to analysis that new apartment move-ins have a large impact on nearby rental markets.
Ham Young-jin, head of the Woori Bank Real Estate Research Lab, said, "Including THE H Bangbae, about 5,000 new apartment households are scheduled to move in within Seocho-gu in the second half," adding, "It can play the role of timely rain in the Gangnam-area rental market, where jeonse and monthly rental listings are scarce."
The current asking price for jeonse for an exclusive 84 square meters at THE H Bangbae is set around 1.2 billion to 1.3 billion won. A representative of a certified real estate agency in Bangbae-dong said, "There are not many jeonse listings in existing nearby complexes, but THE H Bangbae continues to see listings come out ahead of move-in."
Another reason THE H Bangbae is drawing attention in the rental market is that there is no owner-occupancy requirement. The owner-occupancy requirement is a system under which a person who received an allocation of dwellings subject to the presale price cap must live directly in the dwelling for a set period. The aim is to prevent those who received allocations at prices below market from immediately offering the dwellings on jeonse or selling them to gain a profit.
For dwellings under the presale price cap on private land in the Seoul metropolitan area, if the presale price is less than 80% of nearby dwelling sale prices, a three-year residency requirement applies; if it is 80% or more and less than 100%, a two-year requirement applies. Conversely, if the presale price is deemed at or above the nearby market price, the owner-occupancy requirement does not apply. Even complexes with an owner-occupancy requirement are given a grace period allowing move-in within three years from the first possible move-in date, but ultimately the winner must live there within the set period.
Although THE H Bangbae is a complex subject to the presale price cap, no owner-occupancy requirement was imposed on general sale buyers. That is because the presale price set by the Seocho-gu presale price review committee at the time—64.96 million won per 3.3 square meters—was deemed not lower than nearby dwelling sale prices. As a result, general sale buyers can offer jeonse or monthly rent at the time of move-in, and from the tenant's perspective, they can sign lease contracts without considering a three-year grace period or the timing of fulfilling any owner-occupancy requirement.
Park Ji-min, head of the Wolyong Subscription Research Institute, said, "THE H Bangbae has been a complex without an owner-occupancy requirement since presale," adding, "For parties to lease contracts, there is the advantage of not having to consider the three-year time constraint."