“Pangyo Lotto” Anticipation for More Speculation

The government has decided to sell concurrently all 21,000 apartment units (including 4,000 public rental units) to be built in the new city of Pangyo in November this year.

Also, the three home development areas—Okjung in Yangju City, Byeolnae in Namyangju City, and Samsong in Goyang City of Gyeonggi Province— will be developed to the level of Pangyo in order to decentralize the demands flowing into Pangyo.

Accordingly, it is forecasted that the increase movement in home prices in Pangyo and the Gangnam area in Seoul will settle down.

However, since the opportunity for subscriptions will decrease from the concurrent selling, protests from end users are expected, and due to the fact that the demanders, who are waiting for the Pangyo apartment sales, are avoiding subscription for other apartments, there are concerns that the real estate market in the Seoul metropolitan area may fall into a serious slump.

The government held a meeting with real estate-related departments at the Gwacheon Government Complex on Thursday, February 17, and announced the “Feb 17th Stabilization Measures for the Home Market of the Metropolitan Area” with the above details.

According to the measure, the original plan to divide the sales of the Pangyo apartments by four terms, selling 5,000 units in each term, will be changed so that they are all concurrently sold in November.

Also, for the sales of middle-large sized apartments with private areas over 25.7 pyong, the bond bidding system and a pre-examination into the sale price will be executed at the same time to prevent construction firms from bidding for the land at a high price.

In addition, in order to stabilize the reconstruction market in the Gangnam area, the government has decided not to permit the reconstruction for skyscraping apartments being planned, centered on the Hyundai Apartment in Apgujeong-dong.

The release of real estate regulated areas such as home transaction notification areas and home speculation areas will be stopped for the time being, and an examination into the six home transaction notification areas including Gangnam-gu, Seoul will be conducted.

Meanwhile, Deputy Prime Minister and Finance-Economy Minister Lee Hun-jai said at the briefing held at the Gwacheon Complex that day, “We will not use makeshift housing policies to recover the construction business. If signs for real estate speculation show, active measures will be taken immediately.”

Jae-Seong Hwang Chang-Won Kim jsonhng@donga.com changkim@donga.com