The aftermath of the real estate market slump also hit the real apartment sales market in Seoul. Seoul large-scale districts, which were considered invincible in sales, recorded low subscription competition rates one after another, and the winning subscription bonus points were also reduced. ‘Olympic Park Foreon (Dunchon Jugong)’, which attracted a lot of attention to the extent that ‘100,000 subscription rumors’ were raised, had 20,000 applicants, and the average competition rate was only 5.45 to 1, and the winning score of 49㎡ recorded 20 points. Seongbuk-gu’Jangwi Xi’ with 2,800 households plummeted to 20 points for 84㎡, which is highly preferred. The subscription value is 84 points, and 20 additional points for winning can be said to be a box office failure. The poor subscription report card of Seoul’s real complexes can give a negative signal to the overall subscription market, raising fears of unsold sales. The number of unsold apartments across the country was 47,217 as of the end of October, more than three times higher than a year ago, and the rate of increase is steep.
A surge in unsold homes is a dangerous signal for the housing market. If sales do not sell out, construction companies will not be able to recover their investment in time and fall into a liquidity crisis, which can lead to bankruptcy of construction companies and insolvency of securities companies and savings banks that have provided PF loans. Even during the 2008 financial crisis, a series of bankruptcies occurred at mid-sized construction companies and the second financial sector as the number of unsold homes soared to 165,000 due to the collapse in house prices. The possibility of a recurrence of such a crisis cannot be ruled out.
As unsold homes are emerging as the biggest ambush of the economic crisis, drastic measures are urgently needed to prevent the spread of unsold homes. The government has come up with countermeasures one after another, such as lifting regulatory zones and easing loans, but the real estate market, which has been extinguished, is not warm. Minister of Land, Infrastructure and Transport Won Hee-ryong recently said, “There is no business before interest rates,” and predicted that the effect of deregulation would be insignificant, but it is not time to respond lightly. All of Seoul and four Gyeonggi Provinces (Gwacheon, Seongnam, Hanam, and Gwangmyeong) are still tied to regulated areas and are subject to regulations such as subscription, taxation, loans, and resale restrictions. As the warning sound is getting louder in both the pre-sale market and the trading market, Seoul should also consider lifting it from the regulated area. In addition, additional measures to prevent a hard landing, such as easing the heavy acquisition tax for multi-homed people and reviving the registered rental business system, must be hastened.
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