Profitable Real Estate Investment Attracts Wealthy Cash Buyers
Nearly 100,000 applicants flocked to the subscription for ‘Jamsil Leel’, the first apartment complex in the prestigious Gangnam area (Gangnam, Seocho, and Songpa) to be offered since the government’s ‘June 27 measures’. Although the number is less than the peak periods of the past real estate boom, it is considered unusual given the recent downturn in the subscription market. Despite the tightened loan regulations making funding difficult, the anticipation of gaining at least 1 billion KRW (approximately $845,000) in price appreciation has driven many buyers to apply.
According to the Korea Real Estate Board’s subscription home system on the 2nd, Jamsil Leel’s first-priority subscription received 69,476 applications for 110 units, resulting in an average competition rate of 631.6 to 1. Likewise, in the special supply subscription conducted on the 29th of the previous month, 36,695 people applied for 106 units, exceeding a 300 to 1 competition rate. Combined, the number of applicants exceeds 100,000.
Jamsil Leel is a redeveloped complex unifying Miseong and Clover Apartments in Sincheon-dong, Songpa-gu. Out of a total of 1,865 units, excluding those allocated to union members and public rental housing, 216 units are available for general sale. The sale price for 74㎡ units is set at approximately 1.87 billion KRW, significantly lower than the surrounding market rates due to the application of price caps. For reference, similar-sized residences in the nearby ‘Jamsil Raemian I’Park’ traded at 3.1 billion KRW last month.
Under the June 27 measures, housing mortgage loans in the metropolitan area are capped at 600 million KRW. As Jamsil Leel is a post-sale complex, move-ins will begin in January next year. Considering the sale price and the move-in timeline, winners must secure at least 1.2 billion KRW in cash within four months. Despite these stringent funding conditions, over 100,000 people applied. Jimin Park, head of the Monthly Subscription Research Institute, commented, “Given the anticipated price appreciation exceeding 1 billion KRW, the cutoff for subscription points is likely to be very high.”