Korea's housing subscription market saw deepening polarization between Seoul and other regions this year, as demand for newly built apartments in the capital intensified further.
The nationwide first-priority subscription competition ratio fell to 7-to-1, the lowest in five years, while Seoul's average ratio soared to 146-to-1, driven by popular developments in areas such as the "Han River Belt."
The gap widened particularly in the second half of the year as the government tightened regulations on mortgage lending and subscription eligibility in the Seoul metropolitan area, prompting construction companies to delay numerous subscription schedules. Experts forecast that polarization between Seoul and other regions will persist next year, with competition ratios declining in outer metropolitan areas due to the regulatory impact.
According to Real Estate R114, the nationwide first-priority average subscription competition ratio for apartment complexes that accepted applications from the beginning of this year through December 19 stood at 7.02-to-1. This is lower than the ratios recorded during the survey period: 19.27-to-1 in 2021, 7.07-to-1 in 2022, 10.8-to-1 in 2023, and 12.14-to-1 last year.
Seoul's subscription competition ratio, however, rose from 101.83-to-1 last year to 146.22-to-1 this year, the highest level since 164.13-to-1 in 2021. Seoul apartment complexes accounted for seven of the ten developments nationwide that recorded competition ratios exceeding 100-to-1 this year.
Changwon Central I'Park in Changwon, South Gyeongsang Province, recorded the highest competition ratio at 706.61-to-1. In Seoul, Autier Foret in Seongdong-gu recorded 688.13-to-1, Jamsil Luel in Songpa-gu 631.6-to-1, Yeoksam Central Xi in Gangnam-gu 487.09-to-1, Hillstate Isustation Central in Dongjak-gu 326.74-to-1, Banpo Raemian Trinione in Seocho-gu 237.53-to-1, and Rivercent Prugio Weave in Yeongdeungpo-gu 191.35-to-1.
The high subscription competition ratios for Seoul apartment complexes are attributed to strong demand for newly built apartments in prime Seoul locations, combined with the effects of government regulations. Autier Foret and Rivercent Prugio Weave attracted attention as complexes exempt from regulations because their subscription announcements were issued before the June 27 mortgage regulations, which capped mortgage limits at 600 million won in the metropolitan area.
Jamsil Luel, Yeoksam Central Xi, and Banpo Raemian Trinione drew interest as developments where the price ceiling system resulted in sale prices lower than surrounding market prices, with potential capital gains of up to tens of billions of won upon winning the subscription.
Subscription competition ratios in regions outside Seoul either declined or rose only marginally compared to last year. Within the metropolitan area excluding Seoul, Gyeonggi Province fell from 10.33-to-1 to 4.01-to-1, and Incheon dropped from 6.35-to-1 to 3.42-to-1. Consequently, the metropolitan area average subscription competition ratio was halved from 18.29-to-1 last year to 9.75-to-1 this year. Provincial areas also declined from 6.19-to-1 to 4.45-to-1.
Among major provincial metropolitan cities and provinces, only three regions saw increases in subscription competition ratios: Gangwon Province rose from 2.38-to-1 to 7.56-to-1, Ulsan from 1.8-to-1 to 5.03-to-1, and Busan from 1.64-to-1 to 3.38-to-1. Analysts attribute this to continued increases in sale prices this year, with developments outside price-ceiling areas or those lacking solid demand support in prime locations recording poor results, including failures to fill first-priority subscriptions.
The October 15 measures, which included stricter mortgage regulations and actual residence requirements, led to a succession of delayed subscription schedules. Notable examples include Autier Banpo and Acrod Seocho in Seocho-gu, Seoul, and Doosan We've The Central Suwon in Jangan-gu, Suwon, Gyeonggi Province. These developments postponed their subscription schedules in consideration of applicants' burdens related to balance payments and actual residence requirements.
The housing subscription market next year is expected to see further polarization between Seoul and other regions due to concentrated demand for newly built apartments in key Seoul areas. Experts also forecast that demand in outer metropolitan areas will decline significantly due to the regulatory impact.
"The October 15 measures expanded speculative overheated districts, which significantly tightened subscription eligibility to non-homeowner household heads, and this will affect the metropolitan area subscription market next year," said Park Ji-min, CEO of Wolyong Subscription Research Institute. "Developments in outer metropolitan areas, excluding prime locations such as Seoul's three Gangnam districts — Gangnam-gu, Seocho-gu, and Songpa-gu — where capital gains are expected due to the price ceiling system, will likely see declining subscription competition ratios as government regulations reduce demand."
