Seoul, South Korea – A public pre-sale housing project in Uiwa, Gyeonggi Province, has faced a significant setback after a staggering 75% of initial applicants decided to withdraw from the final sale. The high dropout rate has been attributed to a substantial increase in housing prices and prolonged delays in the project.
The Korea Land and Housing Corporation (LH) had initially offered 870 units in the Uiwa Wol-am A1 and A3 blocks through a pre-sale scheme, promising affordable housing options. However, when it came time to finalize the purchase, a majority of the initial applicants opted out.
Several factors contributed to the high withdrawal rate. Most notably, the final sale price was significantly higher than the estimated price presented during the pre-sale phase. The average selling price increased by approximately 11%, adding around 40 million won to the cost of each unit.
Additionally, the project faced a substantial delay of 18 months, further frustrating potential buyers. This delay, coupled with the unexpected increase in housing prices, eroded the confidence of many applicants.
“There was no consideration for the initial applicants in the final pricing,” said a representative from a group of affected pre-sale applicants. “The same pricing was applied to both the initial applicants and new applicants, which is unfair.”
The representative added that the increase in land prices, which was a significant factor in the overall price increase, was disproportionate to the increase in construction costs.
The high withdrawal rate has raised concerns about the viability of South Korea's public pre-sale housing scheme. Critics argue that the scheme has failed to provide affordable housing options for young people and low-income families.
LH will now be offering the remaining unsold units to the general public. However, it remains to be seen whether the public will be willing to purchase these units given the recent negative publicity surrounding the project.
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