Contractor canceling contract following paying compensation
Incheon ‘Seohee Star Hills The Dohwa’
Cancel the sale and review the settlement payment
Paju ‘Unjeong Prugio Park Line’
250 million won discount from the pre-sale price
“When the contract is low, the navel is bigger than the stomach”
As the real estate market shrinks, the real estate market is also faltering. In the metropolitan area as well as in the provinces, there are cases of selling at a discount of 100 million to 200 million won to get rid of unsold properties or canceling the sale of complexes that have already been contracted.
According to the construction and sales industry on the 14th, Yuseong TNS, the operator of the ‘Seohee Star Hills The Dohwa’ project in Dohwa-dong, Michuhol-gu, Incheon, and Seohee Construction, the construction company, are reviewing a plan to pay compensation to the existing subcontractors and cancel the contract.
According to the Korea Real Estate Agency’s subscription home, the complex conducted subscriptions for 144 households in July. In the general subscription, 249 people flocked to supply 73 households, recording an average competition rate of 3.4 to 1, but 104 households did not sign a contract for reasons such as non-contract or ineligible winnings, so they entered unranked subscription in August.
An official from Seohee Construction said, “It is true that we are considering a plan to cancel the entire pre-sale contract and pay the entire down payment and settlement money to the subcontractors.”
Earlier this month, the same situation occurred in Gwangyang, South Jeolla Province. ‘The Sharp Gwangyang Rark Poem’ in Madong, Gwangyang City sent a text message to the contractors and informed them, “We are considering canceling tenant recruitment and postponing sales.”
In this complex, 530 people applied for the recruitment of 898 households in the main subscription in October of this year, and a large number of unsold units occurred from the sale process. In addition, when a number of non-contracts occurred, we are considering a plan to completely cancel the sale and start the sale once more later.
Some places have entered into discounts to get rid of unsold items. ‘Woonjeong Prugio Parkline’ in Paju, Gyeonggi-do is being sold for up to 250 million won cheaper than the pre-sale price. ‘Kantaville Suyu Palace’ in Gangbuk, Seoul, which has published subscription notices seven times this year alone, puts forward a maximum of 15% discount on some types and that it can be sold at a price that is more than 100 million won lower than the initial pre-sale price.
The accumulation of unsold homes is spreading across the country. According to the ‘October Housing Statistics’ released by the Ministry of Land, Infrastructure and Transport, as of the end of October, there were a total of 47,217 unsold homes nationwide, up 13.5% (5,613 units) from the previous month. The number of unsold homes reached a record low of 14,000 between October and November of last year, and is on the rise, surpassing 20,000 in January and 30,000 in July this year.
Lim Byeong-cheol, head of R114 Real Estate Research Team, said, “In the past, developers were able to raise funds even if there were unsold units. It may be better to cancel the sale because there may be a situation where the belly button gets bigger,” he explained. Lim added, “Currently, this situation seems unusual, but as the pre-sale market becomes increasingly difficult, more cases may increase.”
Reporter Yoon Soo-kyung
