Lowering the Sale Price, a Struggle to Prevent Unsold Apartments

The real estate market is freezing up as the number of apartments for-sale in the Gangnam district exceed the number of apartments demanded. Thus, the housing industry is making strong efforts to attract actual demand -- such as lowering the selling price.

According to a survey conducted on the market price of apartments waiting for reconstruction in Seoul and nearby areas by DrAPT, a real estate information provider, the current prices at the end of November has fallen by 4.39 percent compared to the prices at the end of October.

Most notably, the sale price of apartments awaiting reconstruction has fallen by 4.8 percent in the Seoul area, 6.75 percent in Songpa-gu, and 0.54 percent in Gangnam-gu -- which is causing the fall in the sale price of apartments awaiting reconstruction.

Also, the weekly variability rate of other existing apartments has fallen by 0.33 percent, a continuous fall for four weeks. As more and more contracts in the Gangnam real estate market are cancelled due to the stagnating real estate market, the housing industry is competitively lowering the sale price on new apartments.

According to the housing industry, the sale price of seven out of 16 newly built apartments that are set to be out on the market at the 11th concurrent sales on December 4 will be lowered by three to seven percent.

Classified into respective districts, the sale price for Dongil Highvill’s 40 pyong apartment in Whigung-dong, Dongdaemun-gu has fallen to 3.76 hundred million from 4.0425 hundred million, a decrease of 28,250 thousand won. The price for 32 pyong has also fallen from 1,340 thousand won to 2.68 hundred million won.

The 68A pyong and 68B pyong “LG Zai Imperial House” in Seocho-gu Bangbae 1 dong -- which is known to be the largest on sale -- has fallen by 2.049 million and 2.070 million to 12.216 hundred million and 12.416 hundred million won, respectively.

In addition to these apartments, the prices for Dusan We’ve, Brownstone Gusan, Wori U n Me, Hansol Solpark and E-su KCC have been lowered by three to four percent of the initial selling price.

Meanwhile, as the apartment prices since the 10.29’s housing anti-speculation measurement keep falling, the National Tax Service is planning to resettle the standardized price by April of next year before the regular announcement of the standardized prices.

A high official who asked for anonymity said, “According to a research conducted on the standardized price of the nation’s 930,000 houses in Seoul and other areas last Thursday, the fall in the apartment prices are significant, and thus it is likely that the standardized price will be resettled in January of next year if the market prices are lower than the standardized price.”

Ji-Wan Cha Chang-Won Kim cha@donga.com changkim@donga.com