Korean major builders rush to sell apartments as market rebounds

Visitors are listening to a presentation at the Raemian La Grande sales briefing in Seoul on June 21. [Photo provided by Samsung C&T]

South Korea’s large construction companies have shifted gears by accelerating apartment sales after a slow start to the year as major suppliers of apartment houses in Korea are capitalizing on the market’s favorable conditions house with prices and jeonse, or long-term lease, bottoming out in Seoul and its surrounding region, stable interest rates and diminishing recession concerns.

Notably, expectations for increased demand for new apartment homes surged following the overwhelming response of over 70,000 applicants to a publicly housing apartment at the Capital Defense Command grounds in Seoul last week. This event has sparked optimism that apartment complexes with desirable locations and competitive prices will find success in the future.

According to real estate information providers and industry insiders, the top 10 construction companies, ranked by construction capacity, already launched or are planning to launch more than 30 apartment complexes nationwide between June and July. This is a substantial increase compared with the roughly 20 apartments sold by these companies during the first five months of this year.

The surge in housing prices, jeonse rates, and the mitigation of reverse jeonse risks have dampened concerns about a potential “real estate crisis in the second half.” The Korea Real Estate Board’s weekly apartment price trend shows that Seoul apartment prices rose by 0.04 percent in the third week of June, marking the fifth consecutive week of an upward trajectory. Additionally, Gyeonggi-do experienced its first price increase in a year and a half.

Samsung C&T Corp., the largest construction company in terms of apartment construction capacity, is poised to launch its first sales of the year. Next month, it will offer units for sale in Raemian La Grande, a redevelopment project in Seoul. The project encompasses 3,069 households, including 920 households available for general sale. The Imun-Hwikyung Redevelopment Promotion Area, where the complex is located, is set to transform into a new city-grade apartment town, accommodating a total of 14,000 households.

Hyundai Engineering & Construction Co. also resumed its new apartment sales in June after a temporary suspension earlier in the year. Following the launch of sales in Asan, Chungcheong, in the middle of this month, the company plans to sell its apartments under the Hillstate brand in Siheung and Paju, Gyeonggi, by next month.