Seoul Pre-sale Right Transactions Down 34% YoY... Multi-billion Won Premium Listings Surge

As New Supply Shrinks, Asking Prices for Pre-Sale Rights Rise
Seoul One I'Park Sees Nearly 400 Million Won Premiums
Sellers Continue Raising Asking Prices Despite Sluggish Transactions
Record Highs Set Repeatedly as Deals Focus on Seller-As

"Buyers are saying they won't purchase unless it's a quick sale, but sellers want to add an extra 500 million won on top of the price." (A certified real estate agent in Gocheok-dong)

Recently, while the prices of presale rights for new apartment complexes in Seoul have surged, the actual number of transactions has sharply dropped compared to the previous year, showing a conflicting trend. Due to strict loan regulations, buyers are struggling to secure financing, resulting in subdued presale rights trading. However, because of a shortage in the supply of new apartments, transactions are increasingly centered on asking prices, leading sellers to raise the prices of presale rights significantly.

According to the Ministry of Land, Infrastructure and Transport's actual transaction price system on July 23, a presale right for an 84-square-meter apartment at Seoul One I Park was traded for 1,862.45 million won on July 4, setting a new record high. This was nearly 400 million won more than the highest initial presale price of 1,414 million won, reflecting a significant premium.

In Eunpyeong-gu, a 59-square-meter presale right at Hillstate Mediare, where the resale restriction was lifted in May, set a new record at 1,281.05 million won on June 12. Given that the highest initial presale price for this apartment was 1,150.6 million won, approximately a 130 million won premium was added. Currently, the listed properties on the market have premiums of around 200 million won, with asking prices forming at around 1,360 million won.

At Guro-gu Gocheok Prugio Hillstate, where the resale restriction was also lifted during the same period, presale rights are carrying premiums of 200 to 300 million won. On July 4, a 59-square-meter presale right was traded for 1.2 billion won, setting a new record high. The highest initial presale price for a 59-square-meter unit in this complex is 998 million won. Currently, listings are appearing on the market with asking prices exceeding 1.5 billion won, reflecting premiums of about 500 million won. The head of a nearby real estate agency explained, "Buyers are searching for prices similar to the initial presale rates, while sellers want to increase the premium by another 200 to 300 million won, so there is a mismatch between the price expectations of both sides."

Sellers are raising their asking prices for presale rights because the supply of new apartments in Seoul is decreasing. According to Real Estate 114, the number of new units scheduled for occupancy in Seoul next year is projected to be just 11,349, the lowest since 2000. As supply declines and the scarcity of new apartments increases, the market is seeing deals closing at record highs, even after sellers raise their asking prices. The head of another real estate agency near Gocheok Prugio Hillstate stated, "Because of the loan regulations, there are fewer people who can actually buy, but deals are still happening at record prices no matter how much the price is raised, so sellers continue to push up their asking prices."

Despite some transactions taking place, overall buying sentiment remains weak. According to the Ministry of Land, Infrastructure and Transport's actual transaction price system, there have been a total of 621 presale rights transactions counted from January through July 22 of this year, representing a 34% drop compared to 943 transactions during the same period last year. In contrast, the volume of resale-restricted units lifted in Seoul during that period decreased by only about 6% year-on-year. According to proptech platforms Zigbang and Dabang, this year there are 2,283 units in eight complexes in Seoul where the resale restriction has been lifted, which is 160 units fewer than the 2,443 units in the same period last year. This means that the number of transactions has declined by twice the rate of the decrease in supply of presale rights.

Experts predict that transaction volume will remain subdued for the time being, but that record prices will continue to be pushed up as deals continue to be centered around asking prices. Kwon Youngsun, a real estate analyst at Shinhan Bank, said, "Currently, there is a strong accumulation of potential buyers who are eager to purchase if they have the financial means," adding, "If sellers continue to set higher asking prices, deals will occasionally occur, which will then further drive up (presale rights) asking prices in the market."

This content was produced with the assistance of AI translation services.