Are Public Apartments Fueling Prices?

The apartment sale prices of Eunpyeong New Town in Eunpyeong-gu, Seoul have reached 15.23 million won per pyeong (one pyeong is 3.31 sq. m.), causing controversy about high apartment prices. Although this price is lower than that of the recently distributed Pangyo area (18 million won per pyeong), it is 2.5 million won higher than the price of the Sangam district in Sangam-dong, Mapo-gu in 2004 (1.28 million won).

Subscription applications for 2,066 apartments to be held mid-October –

The SH Public Corporation announced on September 14 that the subscription applications for 2,066 apartments in Eunpyeong New Town, including 1,643 in District 1, will be accepted in mid-October.

The apartments up for sale are: 456 34-pyeong apartments at 383.49 million won, 774 41-pyeong apartments at 559,854,000 won, 594 53-pyeong apartments at 779,593,000 won, and 242 65-pyeong apartments at 1,000,467,000 won.

The subscription qualifications for each size are: subscription savings holders for 34-pyeong apartments, subscription deposit balance of six million won for 41-pyeong apartments, subscription deposit balance of 10 million won for 53-pyeong apartments, and subscription deposit balance of 15 million won for 65-pyeong apartments. Residents of the Seoul metropolitan area including Seoul, Gyeonggi, and Incheon are the subjects of this subscription and Seoul residents have the first claim among applicants with the same rating. The moving-in period is scheduled for 2008 or 2009.

61 apartments, three percent of each size, have been specially set aside for heads of families with three or more children who do not possess a residence.

Representative Lee Cheol-su of SH Corporation said, “Eunpyeong New Town provides a comfortable living environment, with a brook and independent schools opening in the area.”

Rising neighborhood prices?–

However, after the decision of SH Public Corporation, a public institution, to set the price at 15 million won per pyeong, worries are being brought up that neighborhood apartment prices and the apartment sale prices of non-governmental construction companies will rise. Unlike Pangyo, which prohibited reselling within five years, Eunpyeong New Town is a City Development Enterprise District which has no limitations regarding reselling, so there are possibilities of real estate speculation.

Deputy-manager Kim Gyu-jeong of Real Estate 114, a domestic realty information firm, viewed that, “The high prices of Eunpyeong New Town, following the high prices of the second tier of Pangyo in Seongnam, Gyeonggi, will have an effect on the prices of Paju and Yongin which have not been distributed yet.

An official of SH Corporation explained, “The high land compensation prices of the Eunpyeong New Town area, foundation facility expenses such as the installation of waste conveyance ducts and high tech resource retrieval facilities caused the apartment sale prices to be set a bit high.”

SH is saying that the 34-pyeong apartments, which are of the public residence size (actual apartment dimension of less than 25.7 pyeong), are being provided close to the construction cost, and the apartments that are 41 pyeong or larger have slightly high prices, considering the fact that people who already possess residences can subscribe.

SH Public Corporation is planning on using the profits of selling Eunpyeong New Town for the management and administration of their nearly 87,000 rental houses. For more information call 02-3410-7496.

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