10,000 households ‘2nd advance subscription’ on the 15th… 2.4 times the first volume, will house price stabilization become a green light?

The apartment complex seen from Namsan N Seoul Tower in Jung-gu, Seoul. 2021.10.5/News1 © News1 Reporter Daeil Oh

While the rate of increase in apartment prices in Seoul has slowed, attention is focused on the impact of advance subscriptions for 10,200 households this week on the real estate market. Some analysts say that the government’s expected ‘house price stabilization’ trend could continue if a large-scale supply continues in the metropolitan area amid the interlocking loan regulations and interest rate hikes.

◇On the 15th, 10,200 households poured in for the second pre-order in 11 districts in the metropolitan area

According to the National Assembly and government officials on the 11th, the Ministry of Land, Infrastructure and Transport will start the second pre-order on the 15th for about 10,200 households in 11 districts in the metropolitan area.

The second pre-registration area for homeless people living in the metropolitan area is △ 1400 households in Wangsuk 2, Namyangju △ 300 households in Sinchon, Seongnam △ 900 households in Naksaeng, Seongnam △ 600 households in Bokjeong 2, Seongnam △ 1000 households in Uijeongbu Uijeongbu △ 1000 households in Daeyami, Gunpo △ Woam in Uiwang 800 households △ 500 Dangsu households in Suwon △ 400 Wonjong households in Bucheon △ 1200 Geomdan households in Incheon △ 2100 households in Unjeong 3, Paju.

In order to apply for this advance subscription, both the homeless and the metropolitan area residents must meet the basic conditions. Areas where residents of the metropolitan area can apply regardless of where they live are △Wangsuk 2 in Namyangju △ Geomdan in Incheon △ Unjeong 3 in Paju △ Dangsu in Suwon.

The Ministry of Land, Infrastructure and Transport believes that if the second volume, which is 2.4 times larger than the first pre-order volume, pours in, it will help to stabilize the real estate market in the metropolitan area, which is joined by end-users. The recent rise in house price is also interpreted as a green signal for the second subscription. This is because, as expectations for house price stabilization rise, speculative demand falls, and interest in pre-orders, where the sale price is confirmed in the main subscription one or two years later, increases.

According to the Real Estate Agency, the rate of increase in apartment prices in Seoul recorded 0.22% on the 23rd of last month, and then changed from 0.21% to 0.21% to 0.21% to 0.20% to 0.19% to 0.19% on a weekly basis, showing a stagnant increase for the sixth week. The metropolitan area is also maintaining 0.34%.

Private indicators, which are sensitive to market prices, also show a more pronounced slowdown in the rate of increase in house prices. The increase in apartment prices in Seoul last week announced by Real Estate R114 recorded 0.10%, a 0.02 percentage point (p) slower than the previous week (0.12%). New towns and Gyeonggi-Incheon showed a flat trend.

1st Vice Minister of Land, Infrastructure and Transport Yoon Seong-won gives the 16th Weekly Housing Supply Briefing at the Government Complex in Sejong on the morning of August 25. On the same day, Vice Minister Yoon said that he is trying to relieve the anxiety of end-users’ supply and demand by expanding the pre-orders that advance the time of housing supply. The pre-order target will be expanded from public sales to private sales, and a total of 101,000 additional households will be supplied early from the second half of this year. (Provided by the Ministry of Land, Infrastructure and Transport) 2021.8.25/News1

◇’Sixth week slowdown’ Seoul house prices, ‘4th week contraction’ buying sentiment… Probable inflow of pre-orders for the observation floor

In addition, the Seoul apartment sales supply and demand index recorded 102.8 last week (as of the 4th), recording a decline for the fourth week. This is a sign that buying sentiment in the apartment trading market has been slowing for a month.

Song Seung-hyeon, CEO of Urban and Economic Cooperation, said, “After the base rate hike and household loan regulations began in earnest, the rise in apartment prices and the buying and selling sentiment have slowed, and the market is waiting and waiting. It is highly likely that the preference for advance subscription, which can be postponed for ~2 years, will increase.”

Unlike the metropolitan area, the increase in local apartment prices and jeonse prices also indicates the transfer of liquid funds to the provinces and the inflow of the real housing demand group into the jeonse market.

The fact that Newlyweds Hope Town (Shin Hee-ta), which had a high preference in the first pre-order, accounted for 40% of the second volume (4200 households), is also considered a success factor.

For example, in the first pre-order, 16,000 people applied for the supply of 418 households in Shinhui-ta in Wirye district, showing a 38.7 to 1 competition ratio. As the quantity of Shinheeta, which is highly preferred, has increased significantly, it is expected that the demand group, which has fallen from the first car, will gather.

Inside and outside the government, the supply signal in the Seoul housing market is expected to become even more pronounced if the possibility of prior subscription in areas that secure district designation requirements in the public housing complex (public complex) and the expansion of the pre-subscription private sale to be implemented next month increases.

A government official said, “Only 19,000 households can apply for 13 public complex projects in advance.” “If the real demand group that has flowed into the real estate market can be accommodated with the amount of advance subscription supplied this month and next month, the possibility of stabilizing house prices is even greater. It will rise,” he said.


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