[안장원의 부동산노트] Market price of 3.4 billion apartments, sales price of 1.7 billion… The two faces of the reconstruction pre-sale price

Pre-sale price of 1.7 billion, market margin (lotto) 1.7 billion. This is a dedicated 74㎡ (30 pyeong) apartment to be sold in Gangnam, Seoul in March. The pre-sale price is close to twice the average apartment price in Seoul, which is half the price of the surrounding market.

In November 2019, the then-minister of the Ministry of Land, Infrastructure, and Transport introduced the regulation of urban sales prices, which he introduced as the last puzzle for stabilizing the housing market. It refers to the upper limit on the sale price in private housing sites such as reconstruction and redevelopment businesses, which limits the price below the land price and construction cost.

The ceiling system for private housing lands began to be applied in earnest from this year after a grace period, emerging as an interest in the housing market. This is because the government expects the pre-sale price to be lower than the existing lotto pre-sale, and the upper limit complex will be poured out in Gangnam this year. However, as the first high-limit pre-sale prices of major complexes come out higher than expected, the odds are mixed.

According to the industry, the number of major reconstructed apartments planned for sale in Gangnam 4 districts (Gangnam, Seocho, Songpa, and Gangdong-gu) this year is 9,000 units in eight complexes (total of 27,000 units built). It is the largest ever in terms of reconstruction sales.

The first runner is Raemianwon Bailey, rebuilding Sinbanpo 3rd Chapel in Banpo-dong, Seocho-gu and Gyeongnam. On the 8th, I received a notification of 56.69 million won per 3.3㎡ of pre-sale price determined by the pre-sale price review committee from Seocho-gu Office. The sales price of 74m2 for exclusive use is around 1.7 billion won.

It is pointed out that a hole was made in the government’s policy to control the sale price after Raemian One Bailey’s sale price was decided. Since 2017, through the Housing and Urban Guarantee Corporation (HUG), which has the right to guarantee the pre-sale, the pre-sale price has been limited since 2017, and the upper limit for private housing land has been introduced to lower it than the HUG, because the pre-sale price has increased further. The pre-sale price approved by the HUG by Raemian One Bailey was 48.92 million won per 3.3㎡.

The surge in the capped pre-sale prices is due to the increase in the publicly announced land price for standard land. The upper limit system uses the land price as an appraisal amount based on the official land price of the standard land. The publicly announced land price of Banpozai in Banpo-dong, a standard site near Raemian One Bailey, rose 15% from last year (21.3 million won) to 24.5 million won per square meter this year. The increase in the announced land price alone is a factor of 6 million won per 3.3㎡ of pre-sale price. The high-limit pre-sale price rises with the rise of the land price, but the pre-sale price allowed by HUG has overtaken the upper limit as the pre-sale price has been in the same position within the previous year.

Based on the publicly announced land price of this year’s standard land, the result of estimating the pre-sale price of 18 wards in the upper limit of private residential land in Seoul was estimated at 31 million won per 3.3 square meter. The average HUG regulated price in Seoul is higher than 27.2 million won per 3.3㎡. Kim Deok-rye, head of the Housing Industry Research Institute’s Housing Policy Research Department, said, “The current government has also raised the price of land in the aftermath of a surge in real estate prices.”

As the upper limit pre-sale price rises, the combination is half-colored. This is because the pre-sale income increases, which reduces the burden of project costs. If the pre-sale price of Raemian One Bailey rises by KRW 7.77 million per 3.3 ㎡ from HUG, the sales income increases by KRW 43 billion, reducing the contribution of members.

The reconstruction project, which was slumped by the upper limit, is expected to speed up. It is expected that Dunchon Jugong, Dunchon-dong, Gangdong-gu, which will be built with more than 12,000 households, will resume pre-sale. Even after the construction of this complex started in December 2019, a year ago, it has been delayed due to a tug of war with HUG. The association requested 35.5 million won per 3.3 m², but the pre-sale price suggested by HUG was 29 million won per 3.3 m². J&K Urban Development CEO Paik Jun said, “Not only reconstruction but also redevelopment cooperatives were concerned that their business performance would be degraded due to the low capped sales price, but the Raemian One Bailey capped sales price is higher than expected,” he said.

For pre-sale consumers, the threshold is upside down. If the pre-sale price exceeds 30 million won per 3.3 square meter, the pre-sale price of 30 pyeong exceeds the limit of the intermediate payment loan of 900 million won. Intermediate payment is usually 40% of the pre-sale price, so 60% of the pre-sale price, including the down payment, must be prepared by yourself.

High-limit complexes have long restrictions on resale and are subject to residency requirements. If the sale price is less than 80% of the surrounding market price, the resale period is 10 years and you must live for 3 years after moving in. As a result of comparing the high-limit pre-sale price by this magazine with the corresponding market price of Kookmin Bank, 10 out of 18 pre-sale prices were less than 80% of the market price. Raemian One Bailey’s resale limit is 10 years. It was 3 years in the HUG regulation.

However, it is a lottery for the homeless cash-rich who can afford it. The market price around Raemian One Bailey, as disclosed by the government, is 94 million to 120 million won per 3.3 square meter. Compared to an apartment that costs 120 million won per 3.3 square meters, the 74 square meters for Raemian One Bailey is cheaper by about 1.7 billion won. Lee Wol-moo, CEO of Mid-Me Networks, said, “In popular regions, the higher the price limit system is still much cheaper than the market price, so the enthusiasm for a lotto will continue.

It is a variable whether the government will seek to redeem lottery market profits. There were many criticisms about the problems such as excessive demand and market distortion caused by the lotto sale, and the Minister of Land, Infrastructure and Transport Byun Chang-heum was also critical of the lotto sale. Lee Hyun-seok, a professor at Konkuk University’s Department of Real Estate, said, “It is more desirable to use the market profits for the public, such as residential welfare, rather than for the winners to take the profits from the low-cost pre-sale prices,” he said.

Jangwon Ahn, Senior Real Estate Reporter