Deliberation Committee, set lower than the union submitted price
84㎡ 1.3 billion won… No interim payment loan
Recognition of ‘high price’, inevitable prospect of unsold
The general sale price of Dunchon Jugong Apartment (Olympic Park Foreon) in Gangdong-gu, Seoul, which is promoting the reconstruction project, has been set at 38.29 million won per 3.3㎡. The Gangdong-gu Office Sales Price Deliberation Committee notified the Dunchon Jugong Reconstruction Association of the sale price on the 16th.
The cooperative initially submitted 41.8 million won per 3.3㎡, but if the decision of the sale price review committee is accepted, the sale price for 59㎡ is expected to be between 930 and 960 million won, and for 84㎡ between 1.3 and 1.35 billion won. In fact, 84㎡ becomes a property for which interim payment loans are impossible. Dunchon Jugong general sales volume is only 84㎡ or less. It is said that there is a strong airflow inside the union that it is no longer possible to procrastinate. It is said that raising the project cost as quickly as possible through general sales is the way to minimize the burden of members’ contributions.
Dunchon Jugong had difficulties in refinancing the project cost of 700 billion won, which had expired last month, but recently succeeded in raising project costs of 723.1 billion won, including interest, through KB Securities and Hanwha Investment & Securities. However, with the funding rate reaching 11.79%, it is in a situation where it has to be repaid early. The fact that it is difficult to refinance any more following the expiration date on January 19 next year is also the reason why Dunchon Jugong cannot demand a higher pre-sale price.
The association plans to accept the sale price set by the district office and announce the general sale in December unless there are any problems.
The remaining problem is ‘unsold’. As of the end of September, as announced by the Ministry of Land, Infrastructure and Transport, there were a total of 41,604 unsold homes nationwide, an increase of 27.1% from the previous month. The general volume of Olympic Park Foreon is 4,786 households, which is one-third of the Seoul pre-sale volume (17,000 households) in the second half of this year. This is the reason why there is a prospect that unsold sales are inevitable in the current situation.
In the current downturn in consumer sentiment, subscription offerings can also be strengthened. Dunchon Jugong Reconstruction is located in Gangdong-gu, but it is classified as a living area adjacent to Songpa-gu. With two Seoul subway lines (lines 5 and 9) available, it is highly accessible to the Gangnam and Yeouido areas. The fact that it is a living area for a large 12,000 households is also considered an advantage.
However, if the ‘high price’ perception is reflected, such as 84㎡ exceeding 1.2 billion won even though it does not belong to Gangnam District 3, there is a high possibility that prospective subscribers will not be able to touch it easily. In the 84㎡ area, which is expected to attract the most subscriptions, it is impossible to loan for intermediate payments. The government allowed apartments with sale prices of 1.2 billion won or less to receive interim payment loans through an emergency economic meeting last month, but Dunchon Jugong 84㎡ is over 1.3 billion won and cannot receive this benefit.