The government looses pre-sale prices to increase housing supply… ‘Lotto apartment’ disappears

In order to increase the supply of housing, the government decided to set the sale price of new apartments supplied in the high sale price management area up to 90% of the surrounding market price. As apartment sales are expected to increase significantly in most cities in the metropolitan area excluding Seoul and regional metropolitan cities such as Busan and Daegu, the lottery apartments, which are more than hundreds of millions of dollars cheaper than the surrounding price, are expected to disappear.

The Housing and Urban Guarantee Corporation (HUG) announced on the 10th that from the 22nd of this month, the high pre-sale price screening system was completely reorganized and implemented. Above all, a certain percentage (85-90%) of the surrounding market price is considered as the upper limit, and management standards have been established according to the price fluctuations.

Previously, there was a problem that the gap with the market price was widening because it was not allowed to exceed 100-105% of the sale price of nearby apartments. In the case of Seoul, the sale price was set at less than half of the surrounding market price, and thus’lotto apartments’ were mass-produced, with only a profit of several hundred million won.

The reorganization of the HUG’s high pre-sale price screening system is a follow-up to the government’s ‘2·4 housing supply plan. It contains the will to increase the supply of housing by realizing the sale price and actively inducing the sale of private construction companies.

In fact, the construction industry expressed anticipation for the reorganization of the screening system for high pre-sale prices. If the sale price is realized, the number of complexes that can promote business is expected to increase even in areas where the low sale price was not feasible.

An official from a large construction company said, “In the case of maintenance projects, if the sale price rises to the market price level, there will be more complexes that are actively promoting the business.” “He said.

However, there are voices of concern that the real estate market, which has been quiet for a while, may regain overheating as the authorities, which have been constantly implementing regulatory policies to prevent a surge in apartment prices, tolerate a sudden surge in pre-sale prices.

In fact, in Busan, the price per 3.3m2 of apartments in popular areas such as Haeundae is close to 40 million won, but most apartments in these areas are sold at 17 to 18 million won. When the new system is implemented, it is possible to sell up to 36 million won, which is 90% of the surrounding market price.

However, areas where the ceiling on the sale price of private residential land is enforced are excluded from the examination of the high sale price. Areas subject to the current private land sales price limit are 18 districts in Seoul (Gangnam, Seocho, Songpa, Gangdong, Yeongdeungpo, Mapo, Seongdong, Dongjak, Yangcheon, Yongsan, Seodaemun, Jung, Gwangjin, Gangseo, Nowon, Dongdaemun, Seongbuk, and Eunpyeong) There are 322 dongs in total, including 309 dongs and 13 dongs in 3 cities (Gwangmyeong, Hanam, Gwacheon).

Accordingly, it is predicted that apartment sales prices in some metropolitan areas and large cities including Busan and Daegu will rise significantly, leading to a reversal of sales in major areas in Seoul that are controlled by sales prices.

Experts are concerned that the rise in pre-sale prices will raise the threshold for home-based arrangements, which will intensify complaints from homeless people. An industry expert pointed out, “With the upper limit of 90% of the surrounding market price allowed, there is inevitably a phenomenon in which the sale price rises.” .