Contractor canceling contract after paying compensation
Incheon ‘Seohee Star Hills Il Dohwa’
Cancel the sale and review the settlement payment
Paju ‘Unjeong Prugio Park Line’
Discount of 250 million won from the presale price
“When the contract is low, the navel is bigger than the stomach”
With the housing market contracting, the housing market is also reeling. In the metropolitan area as well as in the provinces there are cases of sales with discounts ranging from 100 to 200 million won to get rid of unsold properties or cancel the sale of complexes already contracted out.
According to the construction and sales industry on the 14th, Yuseong TNS, the operator of the “Seohee Star Hills The Dohwa” project in Dohwa-dong, Michuhol-gu, Incheon, and Seohee Construction, the construction company, are reviewing a plan to pay compensation to existing subcontractors and cancel the contract.
According to the Korean Real Estate Agency Subscription House, the complex conducted subscriptions for 144 households in July. In the general pass, 249 people rushed to supply 73 households, an average competition rate of 3.4 to 1, but 104 households did not sign up for reasons such as no contract or ineligible winnings, so they entered the pass unranked in August.
An official from Seohee Construction said, “It is true that we are considering a plan to cancel the entire pre-sales contract and pay the entire down payment and severance money to subcontractors.”
Earlier this month, the same situation occurred in Gwangyang, South Jeolla province. “The Sharp Gwangyang Rark Poem” in Madong, Gwangyang City sent a text message to contractors and informed them, “We are considering canceling tenant recruitment and postponing sales.”
In this complex, 530 people applied for the hiring of 898 households in the main subscription in October this year, and a large number of unsold units resulted from the sales process. Also, when there has been a series of no deals, we are evaluating a plan to cancel the sale entirely and start the sale again at a later date.
Some places have discounts to get rid of unsold items. ‘Woonjeong Prugio Parkline’ in Paju, Gyeonggi-do is being sold for up to 250 million won less than the presale price. “Kantaville Suyu Palace” in Gangbuk, Seoul, which has issued seven subscription notices this year alone, offers up to 15% discount on some types and can be sold more than 100 million won below the initial price presale.
The accumulation of unsold homes is spreading across the country. According to the ‘October Housing Statistics’ released by the Ministry of Land, Infrastructure and Transport, at the end of October there were a total of 47,217 unsold homes nationwide, an increase of 13.5% (5,613 units) compared to the previous month. The number of unsold homes hit an all-time low of 14,000 between October and November last year, and is on the rise, surpassing 20,000 in January and 30,000 in July this year.
Lim Byeong-cheol, head of R114 real estate research team, said: “In the past, developers were able to raise funds even if there were unsold units. It may be better to cancel the sale because there may be a situation where the pulsating belly gets bigger,” she explained. Lim added, “Currently, this situation seems unusual, but as the presale market becomes more and more difficult, more cases could rise.”
Reporter Yoon Soo-kyung
