As the pre-sale of Sinbanpo 3rd in Banpo-dong, Seocho-gu, Seoul and Sanghanje, Gyeongnam is much higher than that of the Housing and Urban Guarantee Corporation, the pre-sale of Dunchon Jugong, Gangdong-gu, Seoul is expected to accelerate. Even after the start of construction in December 2019 with a plan to rebuild this complex with 12,000 households, the sale has been delayed due to the issue of the sale price. The picture shows the business site where the existing apartment was demolished.
The government’s large-scale housing supply expansion, such as the 3rd new city, caused an emergency for high sales prices. The increase in the upper-limit pre-sale price of private residential land, which is expected to fall, could open a hole in the government’s pre-sale price policy and hold back the expansion of supply. Among the three principles for expanding housing supply, the current government seems to only pay attention to “many” (third new towns, etc.) and “quickly” (advance reservation) among the three principles. With the introduction of this’payable housing’, the reduction in pre-sale prices is expected to become an issue with the expansion of housing supply.
[안장원의 부동산노트]
② Reduction of pre-sale prices and expansion of housing supply
HUG sales price lower than the upper limit
Increasing the floor area ratio lowers the pre-sale price and increases the number of houses
Lotto subscription overheating measures to become worse
Realization of HUG sales price
The reason why the sale price of Shindonga 3rd Cha and Gyeongnam upper limit sales price in Banpo-dong, Seocho-gu (56.69 million won per 3.3 ㎡) is higher than the pre-capitalization price of the Housing and Urban Guarantee Corporation (HUG) sales price (48.92 million won per 3.3 ㎡) is due to HUG’s way of regulating food service. HUG has set a ceiling on pre-sale prices within the last year. If sales are continued at intervals of less than a year, the sales price will remain in place even after several years. In October 2018, 48.92 million won per 3.3㎡ appeared in Gangnam. In the meantime, the land price has risen a lot, and the upper limit pre-sale price has continued to rise invisibly.
The industry estimates that the sale price of the third Shinbanpo and Gyeongnam upper limit system is 45.2 million won as of January 2019. It was lower than HUG. In January of last year, it rose to 51 million won, exceeding the HUG pre-sale price a year ago.
The ceiling pre-sale price is an industry estimate. Source: Industry Synthesis
In addition to Gangnam, high-limit pre-sale prices beyond HUG are expected to appear one after another. The HUG allowable pre-sale price of the Dunchon Jugong redevelopment complex in Gangdong-gu is up to 29 million won per 3.3㎡, but there is an expectation that the upper limit will exceed 30 million won.
Professor Kwon Dae-jung of Myongji University said, “The HUG regulation method has exceeded its limit.”
If the floor area ratio is raised, the sales price in Gangnam will be below 50 million won per 3.3㎡.
As a method of lowering the pre-sale price by the pre-sale price limit system, it is effective to increase the floor area ratio (the ratio of the total floor area to the project site) so that more houses are built on the same sized land. The floor area ratio of 1000㎡, which can accommodate 10 units of 100㎡, is increased from 100% to 200%, so that 20 units of 100㎡ can be built. Since the amount of land required per household is reduced from 100m2 to 50m2, the land price is cut in half, and the upper limit pre-sale price linked to the land price is also lowered. Increasing the supply of 10 households is a bonus.
If the floor area ratio for the 3rd Shinbanpo and Gyeongnam reconstruction, which is currently building 2990 households, is raised by only 20% (360%), it can be reduced by about 8 million won per 3.3㎡ to 49 million won per 3.3㎡. Based on 84㎡ (hereinafter, exclusive area), it will go down to nearly 300 million won. The increasing number of households is 84㎡ and 650 households.
If the government applies 500% of the allowance for public reconstruction, the pre-sale price will be reduced by 18 million won (84 ㎡ 600 million won) per 3.3 ㎡ and 2,100 units of 84 ㎡ will be built.
Baek Jun, CEO of j&k city maintenance, said, “In popular areas such as Gangnam, where land prices are expensive, the effect of lowering the pre-sale price by increasing the floor area ratio and increasing the housing supply is a big win.”
Source: Industry Synthesis
The key is the scope of the redemption of development profits. Reconstruction cooperatives are eager to participate in public reconstruction, saying that a significant portion of the benefits of the public reconstruction floor area ratio is redeemed for development profits, and that the actual profit is not significant.
If the floor area ratio is raised in the 3rd new town, the sale price will naturally fall. The floor area ratio of the high school district in Seongnam-si, Gyeonggi-do is 160%, with a pre-sale price of 84㎡ approaching 900 million won. If it is raised to 200%, the selling price of 84㎡ will decrease by 100 million won (3 million won per 3.3㎡).
If the Lee Myung-bak administration introduced Bogeumjari housing in the early 2010s and lowered the land price, the sale price could be lowered even further. The apartment land price is calculated based on the construction cost, not the current appraisal amount. The more popular regions with higher appraisal rates, the larger the cut in pre-sale prices. In the case of Bogeumjari Housing, the land under 60㎡ was 95% of the construction cost, and 110% of the construction cost was 60~85㎡.
In the case of Gwacheon Knowledge Information Town, 59㎡ can be reduced by 8 million won per 3.3㎡ (200 million won per household) and 7 million won per 3.3㎡ of 84㎡ (230 million won per household).
Lowering the housing land supply price may reduce the income from the sale of land to new town development implementers such as the Korea Land and Housing Corporation (LH), which could disrupt the supply of rental housing, which is a deficit project.
Land rentals and equity accumulation types, which were once piloted, have the advantage of significantly lowering the sale price. Since the land rental department only receives the price of the building without the price of the land, it can be effective in popular areas where the proportion of land price is high.
Prevent bigger lotto
The countermeasure that should be reviewed in the sale price cut is prevention of’lottery’. This is because the lower the pre-sale price, the larger the lottery, which worsens the side effects of existing lottery such as distortion of the pre-sale market.
In order to reduce the market price difference that winners take, the bond bidding system was implemented in the past pre-sale of Pangyo New Town, and the Park Geun-hye administration raised the housing site supply price from the construction cost to the assessed price. There was a problem of increasing the sale price, although it was reduced to or less.
Professor Hyun-seok Lee of Konkuk University said, “If you exchange some of the market margins at the time of transfer than at the time of sale, you can reduce the lotto without increasing the sale price.”
Heo Yun-kyung, a research fellow at the Korea Institute of Construction Industry, said, “There is a risk that the sales price cuts worsen the business feasibility and reduce the supply. .kr