Top-10 Builders’ Housing Supply Portion Tumbles to 13%
The author is an analyst of NH Investment & Securities. He can be reached at minjae.lee@nhqv.com. -- Ed.
In March, nationwide pre-sales volume amounted to 18,000 units, with a subscription ratio of 22:1. Most of the pre-sales volume was concentrated in Seoul/neighboring areas and regional metropolitan cities. Although the number of unsold units sustained at last month’s level, the impact should remain minimal, as the majority came from relatively small apartment projects.
March pre-sales volume: 18,000 units (-9,000 units y-y)
On a national basis, pre-sales volume in March totaled 18,000 units (-9,000 units y-y). By region, 11,000 pre-sales occurred in Seoul and neighboring areas, 4,000 in the five regional metropolitan cities and Sejong, and 3,000 in eight local provinces. Volume in the Seoul metropolitan area accounted for 58% of the nationwide pre-sales total, breaking down as: 500 units in Seoul, 4,500 units in Incheon, and 5,600 units in Gyeonggi. For reference, 4,000 pre-sales were made in Gyeongsang, 600 in Jeolla, 2,500 in Chungcheong, and 200 in Gangwon.
Nationwide, 84% of the pre-sales volume was accounted for by non-housing association members, with the remaining 16% going to housing association members. But, in Seoul and Gyeonggi province, where the portion of reconstruction/redevelopment projects is generally high, the portion for non-housing association members was 93%, and that for association members was 7%.
Metropolitan cities in Gyeongbuk showing weak pre-sales
In March, the combined number of subscribers in the first and second eligible groups for pre-sales amounted to 217,000 (+56% y-y), with a subscription ratio of 22:1, up significantly from 10:1 in January and 14:1 in February. In particular, Garak Village #6 and #7 stood out, drawing as many as 90,000 subscribers for a subscription ratio of 1,285:1. Pre-sales volume for the apartment complex was made up of units from lessees who gave up their right to purchase their unit after the end of the mandatory 5-year lease period. Of note, the pre-sale price of around W6mn per 3.3m2 was the same as the initial pre-sale price in 2013.
In March, projects with a subscription ratio of less than 1:1 among the first and second eligible groups for pre-sales numbered ten nationwide, including one in the Seoul metropolitan area, two in Jeolla, and one in Jeju. Six of such projects are located in Gyeongbuk, with the majority of them sitting in five regional metropolitan cities, including three in Busan, one in Daegu, and one in Ulsan. As seven out of the ten undersubscribed projects are small-sized projects (less than 300 units), however, the impact on the pre-sale market should prove negligible.
Top-10 constructors’ housing supply portion tumbles to 13%
In March, pre-sales volume for Korea’s top-10 constructors proved languid at 2,000 units, accounting for 13% of the country’s housing supply. Out of the pre-sales volume, the Seoul metropolitan area represented 67%. For reference, the top-10 domestic constructors are Hyundai E&C, Hyundai Engineering, Samsung C&T, GS E&C, Daewoo E&C, DL E&C, HDC Hyundai Development Company, POSCO E&C, Lotte E&C, and SK Eco Plant.