Construction industry in a hurry to ‘sales within this year’… ‘Variables’ until DSR reinforcement, presidential election, and branch election

Various residential types of citizens can be seen in downtown Seoul as seen from the Seoul Sky Observatory, Lotte Tower, Songpa-gu, Seoul. / Reporter Lee Jun-heon

Construction companies are accelerating sales within the year in the metropolitan area and provincial areas. As the total debt-to-income ratio (DSR) will be strengthened from next year, and various variables such as the presidential and local elections are ahead, the sale schedule is hastened.

According to a report from the construction industry on the 21st, construction companies have entered a speed war to complete the sale of the business sites that have been carried over due to the recent licensing and sale price review. As the government decided to include the remaining loan amount in the DSR calculation (40%) for each borrower from January next year, a blow to the presale market is expected.

According to the household debt management plan announced last month, the government will apply individual DSR regulations if the total loan exceeds 200 million won from January next year and 100 million won from July. In addition, after January of next year, it is decided to include the remaining loans from the complexes that are sold after posting a notice for occupant recruitment in the scope of the ‘DRS 40%’ application.

Real Estate R114 calculated that a total of 146,000 apartments nationwide are scheduled to be sold from the end of this month to next month as construction companies are speeding up to issue announcements of occupant recruitment within the year. Gyeonggi-do has the most with about 37,000 households. Incheon and Busan each followed with 17,000 households, Daegu 10,000 households, and Daejeon 9,000 households. Gyeongbuk and Chungnam are also planning to sell more than 8,000 homes each.

In particular, they are putting a lot of effort into promoting the ‘last car sales complex that avoids the DSR regulation’ centering on local apartments. As there are many redevelopment/reconstruction complexes in Seoul, there are many places where the sale period is delayed until next year to calculate the gains and losses of the pre-sale price cap system at the cooperative level, but in the provinces, concerns about a slowdown in the pre-sale market are growing, so it is a good step.

According to the National Housing Industry Research Institute’s November national real estate survey index, the forecasts for Gwangju (68.7), Sejong (75), and Busan (80) were 18.8 points, 17.3 points, and 10.4 points, respectively, higher than the metropolitan area (97.8 → 96.0) compared to the previous month. In the provinces, expectations for the pre-sale market have dropped significantly, especially in metropolitan cities.

The fact that large-scale events attracting attention, such as the presidential election in March and the local elections in September, are scheduled for next year is also considered one of the reasons why construction companies are trying to advance the sale as much as possible. Commercial real estate, such as officetel, which is experiencing a recent subscription frenzy, is likely to be subject to restrictions on financing from next year due to loan regulations, and the industry is busy figuring out the appropriate time to sell.

An official from a construction industry said, “It seems that demand for the last train will be concentrated for officetels that issue a resident recruitment notice by the end of this year, but the situation may change if individual DSRs are applied from next year. Looking at it, there will be many business sites considering the sale time.”

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