'Next complex sells for W1.1b, but this new build is 300 million': Affordable housing subscriptions open at Godeok Gangil and beyond

Homes offered at one-third the price of nearby transactions

Godeok Gangil Complex 3 lists 59-square-meter units in the 300 million won range

Residents may stay up to 80 years with lease renewals

An aerial rendering of Godeok Gangil Complex 3. [SH]

Several affordable housing projects — including Godeok Gangil Complex 3 in Gangdong-gu, Seoul, where units are priced in the 300 million won ($227,000) range — will open apartment subscriptions next month. The developments offer a route to housing stability at well below market prices amid a tight jeonse market, though buyers should be aware that resale restrictions and other conditions apply.

According to Seoul Housing & Communities Corporation (SH), special supply subscriptions for land-lease homes at Godeok Gangil Complex 3 begin Sunday, with general supply following Monday. Applicants must be members of households without a home registered in the Greater Seoul area — Seoul, Gyeonggi Province or Incheon. A total of 566 units have been set aside for special supply categories, including youth, newlywed couples, first-time buyers and newborn-family households, while 147 units are allocated for general supply. If any pre-applicants withdraw, the general supply pool will expand accordingly.

Because the land is publicly owned while buyers own only the building — the defining feature of a land-lease pre-sale home — prices are significantly below market rates. Building pre-sale prices by exclusive use area are 280 million to 320 million won for 49-square-meter units and 340 million to 390 million won for 59-square-meter units. Buyers must also pay a monthly land lease fee of 426,000 won for 49-square-meter units and 511,500 won for 59-square-meter units. Up to 60 percent of the land lease fee can be converted into a deposit. The land lease term is 40 years and may be renewed for another 40 years with the consent of 75 percent of owners.

Floor plan for the 59B type at Godeok Gangil Complex 3. The pre-sale price for 59-square-meter units, excluding the land lease fee, ranges from 340 million to 390 million won. [Godeok Gangil Complex 3 resident recruitment announcement]

Of the 566 special supply units, 44 percent are reserved for households with newborns. Youth, newlywed couples and first-time buyers each receive 106 units. Successful applicants face a 10-year resale restriction, a 10-year re-selection ban and a five-year residency obligation. An SH official said information on units forfeited by pre-applicants would be posted on the corporation's website Wednesday, and urged prospective buyers to check the general supply figures before applying.

Pre-sale prices at Godeok Gangil Complex 3 are slightly higher than those at Magok Complex 17, which held subscriptions in March, though the monthly land lease fee is comparatively lower. At Magok Complex 17, the highest pre-sale price for a 59-square-meter unit was about 343 million won, with a land lease fee of around 660,000 won. Godeok Gangil Complex 3 does not offer 84-square-meter units.

The pre-sale prices also stand out sharply against surrounding market rates. The 59-square-meter units at Gangdong Riverburst Complex 4 — separated from Godeok Gangil Complex 3 by a single road — have been changing hands at around 1.1 billion won, nearly three times the pre-sale price. The pre-sale price is also roughly half the jeonse rate for the same unit size at Gangdong Riverburst Complex 4, which runs around 700 million won. That price competitiveness drove fierce competition at the earlier Magok Complex 17 subscription, where special supply drew roughly 70 applicants per unit and general supply saw a ratio of 125 to 1.

Interior of the 49C3 type unit at Godeok Gangil Complex 3. [Godeok Gangil Complex 3 cyber model house]

Experts estimate that winning a unit at Godeok Gangil Complex 3 currently carries an implied value of more than 200 million won. Park Ji-min, head of the Wolyong Apartment Subscription Research Institute, said it was reasonable to think of the arrangement as living in a long-term lease worth around 500 million won, given the ongoing land lease payments. "Right now it is an option that lets you live long-term at housing costs roughly 20 to 30 percent below nearby jeonse rates," Park said. "When you sell after 10 years, the expected gain would be the difference between the jeonse market rate at that time and the original pre-sale price." He cautioned, however, that anyone forced to sell during the resale restriction period must apply to SH to buy back the unit, meaning they cannot capture the full market gain.

Similar low-entry-cost public pre-sale offerings are also coming in Gyeonggi Province. On Nov. 9, Gyeonggi Housing & Urban Development Corporation (GH) plans to open subscriptions for Gwanggyo Jayeon & Centreville, an equity-accumulation housing project in Gwanggyo new town. Of the development's 600 units, 240 — all 59-square-meter units — will be offered under a public pre-sale scheme in which buyers start with a 25 percent ownership stake and can build up to full ownership over 20 years.

Under the model, sometimes called a "savings-account home," the buyer and GH become co-owners once the initial stake is acquired, and the buyer pays rent on GH's share until full ownership is reached. The subscription is also expected to carry a 10-year resale restriction, a 10-year re-selection ban and a five-year residency obligation. Park said the equity-accumulation model closely resembles buying an apartment with a mortgage and repaying principal and interest over time. "Both complexes are affordable housing options that allow long-term, low-cost owner-occupancy, so strong demand is expected for both," he said.

hope@heraldcorp.com