The general sale of the 'Banpo DH Clast (Banpo 1·2·4 Districts)' has been confirmed for next year, leading to projections that the so-called '4 billion won lottery' sale might be possible. As the housing price ceiling system is applied in areas experiencing sharp increases in house prices, controversy is expected over the excessive profits that winners might gain.
According to the maintenance industry on the 20th, the 'Banpo 1·2·4 District Reconstruction Association' plans to hold a general sale around June next year. The name of the reconstruction complex is 'Banpo DH Clast' with a total of 5,007 units. The general sale volume is 1,832 units. The Banpo DH Clast is a super-large complex by the Han River, and the sale price is expected to be around 80 million won per 3.3 square meters, applying the price ceiling system.
An official from the reconstruction association said, 'Currently, we are at the stage of finishing member sales and applying for management change,' adding, 'There are a quite substantial amount of general sales.'
Market analysis indicates that if a person wins the lottery for this apartment, the profit could reach up to 4 billion won. Although it is located in a large complex near the Han River, the price ceiling system limits the sale price to a certain level. If sold at 80 million won per 3.3 square meters, the price for a dedicated 84 square meter unit would be set at an average of about 2.7 billion won, with the possibility of prices reaching into the 3 billion won range depending on the floor and view.
However, this is significantly lower compared to the actual transaction prices of nearby newly built complexes. For instance, an 84 square meter unit at Raemian One Bailey was sold for 7 billion won (12th floor) in March, setting a record high. Other similar units in the same month traded between 5.4 billion to 6 billion won. This means that the profit for winners of the DH Clast lottery could potentially reach between 2.6 billion to 4 billion won. Given the possibility of further increases in apartment prices in the Banpo area by next year's sale date, the profit from winning could become even larger.
As the sale date for this apartment approaches, controversy over the 'price ceiling system' is expected to reignite. The 'price ceiling system' is a regulation that restricts sales to below the price determined through deliberation during the sale of multi-family housing. It binds the sale price to be no more than 'land cost + construction cost.' Currently, it is applied only in the three districts of Gangnam (Gangnam, Seocho, Songpa) and Yongsan for private sale apartments.
While the original intention of the 'price ceiling system' was to prevent overheating of house prices due to rising sale prices, it has been criticized for generating more significant side effects, such as the creation of 'lottery applications.' The phenomenon of overcrowding in applications by hopeful buyers seeking tens of millions of won in profits leads to only a few winners enjoying special advantages.
Professor Park Hap-soo from Konkuk University’s Graduate School of Real Estate noted, 'From the association's perspective, it can lead to an increase in additional contributions, justifying delays in the project, ultimately creating a vicious cycle of delayed supply,' and added, 'Only a select few winners would enjoy benefits beyond the 'lottery.'
On the other hand, there are also opinions that cannot overlook the advantage that diligent applicants who accumulate application points can secure their own homes at relatively lower prices. Ham Young-jin, head of the Real Estate Research Lab at Woori Bank, said, 'Considering the association's perspective and the promotion of supply, the price ceiling system may be burdensome, but it holds significance in allowing people to acquire their homes affordably as so-called 'half-price apartments.' Therefore, careful consideration is needed regarding the potential abolition of this system.'
Meanwhile, movements to abolish the 'price ceiling system' are emerging in anticipation of the presidential election. The Korea Housing Association included the side effects of the 'price ceiling system' in its 'policy proposal for the upcoming 6.3 presidential election.' Additionally, the officials from 26 reconstruction associations in Yongsan recently formed a 'meeting to abolish the price ceiling system' and decided to push for its elimination.