[Opinion] A Three-Kilometer Line at Songdo, Incheon

The weekend news reported on a three-kilometer-long line of people waiting to subscribe for apartments in an officetel named “The Prau” at dawn on March 10, two days before the drawing day. Many temporary tents were built even amid the chilly weather. Waiting tickets were distributed among them and tickets with an early number were selling for hundreds of thousands of won each. Those holding early numbers in line with big smiles despite the strong winds seemed excited about possibly holding a “premium” ticket worth 70 to 100 million won.

Officetels are not categorized as houses even in highly speculative districts, so reselling subscription rights to a third party is possible, and a subscription bankbook is not required. A failure in the land lottery automatically enables the receipt of subscription application fees. In addition, the officetel mentioned above sold by Kolon Construction has a going rate of about 6.5 million won per pyeong (one pyeong corresponding to 3.31 square meters), which is about five million won per pyeong cheaper than those around it, according to some analyses. People must have cried out in the waiting line, “Just go get 35 million won for the application fee.”

It is rather strange for tens of thousands of people to gather on line to wait for the sale of 123 officetel units, even when they know the competition ratio is hundreds to one.

Internet subscription system-

The subscription application service abruptly halted because the overnight waiting line and a new line that formed in the morning got tangled up, which caused some harsh brawls. Kolon Construction said, “We decided to move the subscription process online, and will announce a detailed timeline after consulting with the bank.” It is regrettable that they went through such a struggle when it all could have been avoided by using the internet.

The international business complex where the officetel is located was developed starting 2002. So far, criticism has poured in regarding it because of its lack of investment in business facilities, and some say that it is expanding its living facilities merely to reap development profits.

It would have been great if corporate investment applicants at home and abroad lined up in a 300-meter long line only, not a line of three kilometers.

The ongoing craze for Songdo real estate means that there is still a shortage of stand-by funds for investment. The government’s “tax bombs” slowed down transactions, and reversed the direction of housing prices, but failed to let speculative funds flow into the production sector. This is a limit and paradox of the real-estate policy of the government, which has only targeted lowering housing prices. The government’s inducement measures to cut apartment sale prices are likely to spread the craze of apartment subscriptions.

Hong Kwon-hee, Editorial Writer, konihong@donga.com