Korea new-home subscription competition rate halves as supply rises 34%
In short
South Korea’s new-home subscription market split sharply this year: general supply rose 34% year-on-year to 85,321 households, but the first-tier average competition rate fell to 5.6 to 1 from 10.2 to 1, according to Zigbang data reported by Asia Economy. Demand concentrated in Seoul and third-generation new towns, where Seoul averaged 63.1 to 1 and several Namyangju and Hwaseong complexes topped 100 to 1. The highest rate was 1,099.1 to 1 at Arcro Seocho in Seoul’s Seocho District.
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South Korea’s new-home subscription market diverged sharply this year, with more units on offer but weaker overall competition and demand piling into Seoul and third-generation new towns, Korea Economic Daily, Asia Economy and Newsis reported. Newsis said the year’s average competition rate fell to about half of the previous year’s, with Seoul and third-generation new town sites running at around 100 to 1. [ 1 , 2 , 3 ]
According to Zigbang data cited by Asia Economy, based on subscription notices from Jan. 1 to Sep. 18, the national first-tier average competition rate was 5.6 to 1, down from 10.2 to 1 a year earlier. General supply rose 34% to 85,321 households from 63,668, while first-tier applications fell 26.6% to 475,009 from 646,891. [ 2 ]
Public-sale projects outperformed private ones. Asia Economy reported that 20 public complexes offering 6,735 households drew 127,842 applications for a first-tier average of 19 to 1, down from 38.1 to 1 but 4.3 times the private-sale rate of 4.4 to 1, itself down from 7.4 to 1. Private projects accounted for 191 complexes and 78,586 households with 347,167 applications. Complexes under the price ceiling averaged 10.8 to 1 against 3.7 to 1 for those not covered, a gap that narrowed from 5.8 times to 2.9 times. [ 2 ]
Seoul’s first-tier average was 63.1 to 1, down from 132.9 to 1, and all 22 Seoul complexes drew more first-tier applications than units offered. The highest national rate was 1,099.1 to 1 at Arcro Seocho in Seocho District, where 30 general-supply units drew 32,973 applications; Otier Banpo followed at 710.2 to 1 and Ichon Ruel at 135.0 to 1. Those three were all price-capped projects in Gangnam and Yongsan. Outside Seoul, the strongest rates were at third-generation new town and other greater Seoul sites: Namyangju Wangsuk 2 District A3 at 126.8 to 1, Wangsuk Atera (A1) at 105.5 to 1 and Hwaseong Dongtan 2 District C27 at 100.6 to 1. [ 2 ]
Kim Eun-sun, a lab head at Zigbang, said results differed between complexes even within the same region and the same supply type, and predicted that demand would keep moving selectively according to location, price competitiveness and nearby supply conditions, Asia Economy reported. [ 2 ]
Why it matters
The figures suggest that more supply did not broaden demand: buyers concentrated on Seoul and third-generation new town sites while other areas drew far weaker competition. Business outlets present this as a market where outcomes depend on location, price competitiveness and nearby supply rather than on the overall volume of units offered.
Key facts
- General-supply volume for the year through Sep. 18 rose 34% to 85,321 households from 63,668 a year earlier, according to Zigbang data cited by Asia Economy. [ 2 ]
- The national first-tier average competition rate fell to 5.6 to 1 from 10.2 to 1, and first-tier applications dropped 26.6% to 475,009 from 646,891. [ 2 ]
- Public-sale projects averaged 19 to 1, down from 38.1 to 1, but 4.3 times the private-sale rate of 4.4 to 1, which was itself down from 7.4 to 1. [ 2 ]
- Seoul’s first-tier average was 63.1 to 1, down from 132.9 to 1, and all 22 Seoul complexes took in more first-tier applications than units offered. [ 2 ]
- The highest national rate was 1,099.1 to 1 at Arcro Seocho in Seocho District, where 30 general-supply units drew 32,973 applications. [ 2 ]
- Third-generation new town sites led outside Seoul, with Namyangju Wangsuk 2 District A3 at 126.8 to 1, Wangsuk Atera (A1) at 105.5 to 1 and Hwaseong Dongtan 2 District C27 at 100.6 to 1. [ 2 ]
- Price-capped complexes averaged 10.8 to 1 against 3.7 to 1 for non-capped complexes, a gap that narrowed from 5.8 times to 2.9 times. [ 2 ]
- Korea Economic Daily and Newsis led on the divergence between rising supply and weakening competition, with demand moving to Seoul and third-generation new towns. [ 1 , 3 ]
Confirmed by several sources
Still unclear
- Whether the concentration of demand in Seoul and third-generation new towns will continue through the rest of the year. The only forward-looking statement is a projection by a Zigbang official cited by one outlet; the documents contain no later data.
- Why the average competition rate fell by about half even as supply rose 34%. Only Asia Economy examines the cause, citing a research official who points to demand moving selectively by location, price competitiveness and nearby supply conditions; the other documents give no reasons.
What local media are saying
Timeline, local time
- Korea Economic Daily publishes its report on rising supply, departing subscribers and demand shifting to Seoul and third-generation new towns. [ 1 ]
- Asia Economy publishes Zigbang’s full data set on competition rates, supply volumes and the top-ranked complexes. [ 2 ]
- Newsis publishes its report on the competition rate halving and Seoul and third-generation new town sites running near 100 to 1. [ 3 ]