The author is an analyst of NH Investment & Securities. He can be reached at minjae.lee@nhqv.com. — Ed.
In February, pre-sales performance differed widely by construction project. While competition heated up for projects sitting in preferred locations with attractive prices, other projects were significantly undersubscribed. For the month, unsold housing is estimated at over 78,000 units.
February: Nationwide pre-sales volume and subscription results
In February, pre-sales volume (based on Apply Home and pre-sales notice dates) amounted to 8,133 units nationwide (-14,000 units y-y, +7,000 units m-m). The units up for pre-sale were under 13 projects. Competition was high for those with competitive locations and pre-sale prices—Bokdae Xi The Sky in Cheongju, Chungbuk (GS E&C, 715 units, 7.11:1), Eco Delta City Prugio Lynn in Gangseo-gu, Busan (Daewoo E&C, 886 units, 9.69:1), and Guri St Lotte Castle Signature in Guri, Gyeonggi (Lotte Construction, 1,180 units, 3.75:1). In contrast, Hillstate Pyeongtaek Hwayang in Pyeongtaek, Gyeonggi (Hyundai Engineering, 1,571 units, 0.08:1), Suwonseong Jungheung S-Class in Suwon, Gyeonggi (Jungheung Construction, 1,154 units, 0.78:1), and The Sharp Arte in Michuhol-gu, Incheon (POSCO E&C, 770 units, 0.48:1) saw undersubscription.
In February, subscribers in the first and second eligible groups for pre-sales totaled 24,600 (-86% y-y, +5,885% m-m) nationwide, with a subscription ratio of 5.25:1. However, out of the 13 pre-sales sites nationwide, seven were undersubscribed in the first eligible group, resulting in 2,230 unsold units in total. Cumulative unsold pre-sale apartment units are estimated to have exceeded 78,000 in February. In particular, as for the three undersubscribed sites (Incheon, Suwon, Pyeongtaek, a total of 2,934 units) in Seoul and its neighboring areas, the subscription ratio was at a mere 0.29:1.
It appears that successful pre-sales sites in February shared: 1) relatively attractive (lower) pre-sales prices compared to those of neighboring apartments; and 2) competitive locations. Of note, the pre-sale price was set at W420mn (85m2) for Bokdae Xi The Sky, W540mn (85m2) for Eco Delta City Prugio Lynn, and W980mn (101m2) for Guri St Lotte Castle Signature
Weekly apartment sales price index and jeonse price index
Over Feb 28~Mar 6, the apartment sales price index fell 0.34% nationwide, sliding at the same pace as last week. By region, the index slipped 0.21% in Seoul, 0.38% in Seoul’s neighboring cities, 0.41% in five regional metropolitan cities, and 0.20% in eight provinces. The apartment jeonse (lump sum rental deposit) price index dwindled 0.46%, with the pace of decrease slowing from the previous week’s 0.55%. By region, the index shrank 0.58% in Seoul, 0.58% in Seoul’s neighboring cities, 0.51% in five regional metropolitan cities, and 0.23% in eight provinces.
