Why Seoul New Town Presale Prices Are Soaring: Noryangjin and Heukseok Cases and Application Criteria

As presale prices for new apartments in Seoul’s new towns rise rapidly, some complexes outside Gangnam appear more expensive than certain complexes in the Gangnam area. However, rather than a simple reversal of the hierarchy among neighborhoods, this phenomenon should be understood as the combined result of differences in whether the presale price ceiling applies, housing types, the number of units offered to the general public, construction costs, and product configurations.

The prices and schedules of individual complexes in this article were compiled based on materials provided by the operator. Presale prices, complex names, and supply dates may change as projects progress, so the latest tenant recruitment notice posted on CheongyakHome should serve as the final basis for decisions.

Changes in New Town Presale Prices Based on the Provided Materials

The following table summarizes representative cases in the provided materials, focusing on the highest presale price for an exclusive area of 84㎡. Even with the same exclusive area, simple comparisons have limitations because the floor, orientation, supply area, land ownership share, paid options, and balcony expansion costs may differ.

For Heukseok New Town, the provided materials explain that an exclusive 84㎡ unit at Heukseok Riverpark Xi, supplied in 2020, was priced at approximately KRW 1 billion. A simple comparison with Summit The Hill’s KRW 2.7194 billion–KRW 2.9782 billion indicates a nominal presale price approximately 2.7–3 times higher. However, because the exact housing types, floors, options, and supply conditions of the two complexes are not the same, this should not be interpreted directly as the price increase rate for an identical home.

Why Presale Prices Outside Gangnam Appear Higher Than Those in Gangnam

Application of the Presale Price Ceiling Differs

For homes subject to the presale price ceiling, presale prices are calculated based on factors such as land costs, standard construction costs, and recognized additional costs. By contrast, in redevelopment and reconstruction projects not subject to the ceiling, project costs, association decisions, construction terms, and the market’s ability to accept the price may have a greater impact.

The provided materials assume that Gangnam’s three districts and Yongsan-gu are areas subject to the ceiling. Regulated areas and the scope of application may change, and conditions may differ by project even within the same area. Actual applicability should therefore be checked in the relevant tenant recruitment notice and materials from the relevant authorities.

Comparing Different Housing Types Exaggerates the Price Reversal

The prices mentioned in the materials for Acro de Seocho and Hauterre Banpo in Seocho-gu are in the KRW 1.8 billion range and KRW 2 billion range, respectively, based on an exclusive area of 59㎡. Heukseok New Town’s KRW 2.7 billion–KRW 2.9 billion range is based on an exclusive area of 84㎡. It is therefore inappropriate to conclude that Heukseok is more expensive than Gangnam based solely on the total prices of 59㎡ and 84㎡ homes.

The following conditions must be aligned to determine whether prices have reversed.

• The same exclusive area or price per unit of exclusive area
• Tenant recruitment notices issued at the same time
• Homes with similar floors and orientations
• Whether balcony expansion costs and paid options are included
• Whether the presale price ceiling applies
• Expected move-in date and whether the project is sold after construction

The Price per 3.3㎡ Differs From the Total Price

Prices per 3.3㎡ used in the presale market are generally presented based on the supply area. Even for an apartment with an exclusive area of 84㎡, the supply area and contract area, which include common areas, vary by complex. Therefore, calculating the total presale price by multiplying the price per 3.3㎡ only by the exclusive area may produce a figure that differs from the actual amount in the notice.

Key Factors Driving Up Presale Prices

Scarcity of General-Presale Units in Redevelopment and Reconstruction Projects

Redevelopment and reconstruction complexes offer only some of their total units to the general public after excluding units allocated to association members, rental housing, and other categories. When few units are offered to the general public, even a limited number of applicants can generate a high subscription ratio. A large complex does not necessarily have a large number of general-presale units.

Limited Supply of Newly Built Homes in Seoul

In areas where existing homes account for a large share of the housing stock, large newly built complexes are regarded as scarce products. When access to the Han River, proximity to central business districts, subway lines, school districts, and living infrastructure are combined, expectations for a new-build premium may increase further.

Rising Construction and Financing Costs

Presale prices for redevelopment and reconstruction projects may reflect not only material and labor costs but also financing costs resulting from project delays, demolition and relocation costs, specialized design, and community facility expenses. Disputes over construction costs between contractors and associations, as well as project delays, can increase the final project cost.

Premium Brands and Product Differentiation

High-end brands, distinctive exterior designs, landscaping, community facilities, and premium finishing materials are used to justify higher presale prices. However, there is no guarantee that the brand premium will be reflected in future resale home prices at the same rate.

Learning Effect From Rising Prices at Subsequent Presales

When complexes previously considered expensive repeatedly appear inexpensive compared with subsequent complexes, prospective applicants may feel burdened by waiting for prices to fall. Caution is needed because the perception that “today is the cheapest day” relies more on the possibility of future price increases than on whether the current price is reasonable.

How to Interpret High Subscription Ratios

A first-priority sellout or high average subscription ratio only demonstrates demand at the application stage. It does not guarantee completed contracts, higher market prices after move-in, or investment returns.

The following indicators should be reviewed together when assessing subscription ratios.

In particular, applicants for popular housing types may drive up the overall average subscription ratio. Contract conditions for lower floors, less-preferred orientations, or expensive housing types may differ from the average subscription ratio.

Actual Costs to Calculate Before Applying

The home price stated in the presale notice may not represent all the funds ultimately required. Applicants should prepare a financing plan by adding the following items.

Estimated total acquisition cost = Presale price + Balcony expansion cost + Paid options + Acquisition-related taxes·expenses + Loan interest and guarantee costs + Move-in-related expenses

The main items to check are as follows.

• Amounts and payment dates for the down payment, interim payments, and final payment
• Whether interim-payment loans are available and how interest is borne
• Possible application of the individual loan-to-value ratio and debt service ratio
• Schedule for disposing of an existing home or returning a rental deposit
• Acquisition tax and registration costs
• Prices for balcony expansion and optional appliances·finishing materials
• Additional housing and financing costs in preparation for move-in delays

The higher the presale price, the more important the availability of a final-payment loan may become relative to securing the down payment. Financial regulations may vary depending on an individual’s income, debt, number of homes owned, and the timing of loan execution. The loan amount available at move-in should therefore not be assumed based only on current conditions.

Planned Complexes Must Be Distinguished From Confirmed Supply

The provided materials mention Noryangjin New Town District 5, Summit The Tresia; Heukseok New Town District 9, THE H Kentro Nine; and Jangwi New Town District 10, Jangwi Prugio Mark One as major upcoming projects.

However, the complex name, number of general-presale units, presale timing, and price of a redevelopment or reconstruction project may change depending on management and disposition procedures, construction cost negotiations, presale guarantees, permits and approvals, and the association’s schedule. Estimated presale prices reported by the media or included in market forecasts should not be treated as confirmed prices.

The verification sequence is as follows.

1. Check the project stage and association notices on Seoul’s Jeongbi Saeop Jeongbo Mongttang.
2. Check CheongyakHome to see whether a tenant recruitment notice has been posted.
3. Review the notice for supply prices by housing type, options, payment terms, and subscription eligibility.
4. Compare actual transactions for nearby new homes and occupancy rights through the Ministry of Land, Infrastructure and Transport’s Actual Transaction Price Disclosure System.
5. If relying on loans, prepare a conservative financing plan subject to a financial institution’s review.

Criteria for Deciding Whether to Wait or Apply

If the decision to apply is based only on the expectation that “the next presale will be more expensive,” applicants may overlook price corrections, changes in interest rates, and loan risks at the time of move-in. Conversely, automatically viewing the current presale price as excessive based only on past prices may fail to reflect supply scarcity and differences in location.

It is reasonable to consider applying only when all the following questions can be answered.

• What is the price difference compared with actual transaction prices for relatively new homes nearby?
• Is the cost affordable even after including interest incurred until move-in?
• Is there a willingness to live in the home even if home prices do not rise for a certain period?
• Can the down payment and final payment be secured without relying on other people’s funds or uncertain proceeds from a sale?
• Have the resale restriction, owner-occupancy obligation, and subscription restrictions been checked in the notice?
• Have the actual supply prices by building and unit been compared rather than the estimated general-presale price?

Seoul new town presale prices simultaneously reflect concerns about supply shortages, a preference for newly built homes, and rising costs. Downward price rigidity may be observed, but this does not mean prices will hold at every complex and at all times. The presale notice, total acquisition cost, nearby actual transaction prices, and the individual’s repayment capacity should take priority over the subscription ratio.