“Targeting Premiums Than Owning Houses“

Bipolarization of large firms and mid-small firms is found deepened as the large firms have taken more than half of apartments recently sold in Seoul this year.

In addition, it has been analyzed that among subscribers for new apartments, more people participated the subscription with an anticipation of investment profit than with a hope to purchase a new house.

▽ Bipolarization of Apartment Sales Market== 25,009 apartment units were sold to the public though 11 times of simultaneous sales, including the 11th Simultaneous Apartment Sales planned and announced by the Seoul City. It is an increase of 22.8 percent over last year`s 20,373 units.

Among them, upper 7 leading firms, such as Hyundai Industrial Co., Daerim Industry, Samsung Corp. Daewoo Construction Co., LG Construction Co., Lottee Construction Co. and Hyundai Construction Co. (in the order of the number of sales of units) sold 12,713 units, thus marking 50.8 percent of the total sales.

Not only the number of but also the competitive rate for the units sold by those firms was very high. Construction circles analyze that large firms are preferred as the number of construction firms going bankrupt after the foreign currency crisis is increasing.

Hyundai Industrial Co. sold 4,610 units, including 2,061 units built on the factory land of Sampoong Paper Co. located in Chang-Dong, Tobong-Gu, which positioned it to the top among residential house construction firms in terms of sales. Daerim Industry sold 2,412 units by creating `Daerim Shindorim Town`.

▽ `Targeting Premium Rather Than Owning a House`== The number of those who made an investment with an expectation of investment profit was greater than that of those hoping to own a house.

According to a survey of `the propensity of subscribers for new apartments` conducted on 925 netizens by the on-line real estate information firm, Dr. Apart, △ 17.2 percent answered, `To earn an investment profit before after the sale and before the contract` △ 9.5 percent, `To earn an investment profit after sales-contract`, thus meaning that 26.7 percent of subscribers expected an investment premium, whereas 21.7 percent answered, `To own a house`. 51.6 percent answered, `Both to earn investment profit and to own a house`.

Conditions of location, including traffic conditions, were referred to as the first criterion for choosing apartments at the time of subscription (82.1 percent), followed by the name brand of construction firms (7.4 percent), the interior structure and the size of apartment complex (6.2 percent) and the sales price (4.3 percent).

Ja-Ryong Koo bonhong@donga.com