Residential towns south of the Han River in Seoul are proving to be a magnet for investment, with planned apartment complexes coming up for presale soon.

A complex in Gaepo in the Gangnam area, to be built by Hyundai Engineering and Construction, is over 100 times oversubscribed, with the first round of presales closed Wednesday, according to the Korea Financial Telecommunications & Clearings Institute and the developer.

Some 6,339 people subscribed for 63 available units in “The H Honor Hills” complex, recording an average competition rate of 100.6:1, the highest in the country so far this year.


Consisting of 23 buildings with a total of 1,320 units and to be completed by the summer of 2019, The H has hefty, but below-market, price tags. The smallest unit on offer -- an 84 square-meter two-bedroom unit -- costs 1.45 billion won ($1.3 million).

The subscription frenzy comes as Korea’s authorities, alarmed by a surge in household debt, unveiled Thursday new measures to cool the housing market by restricting new supply.

Investors seeking high return opportunities have been flocking to the housing sector, particularly for the presale market for to-be-built homes, many taking advantage of cheap loans with record-low interest rates.

“The housing market in Seoul and its suburban areas are seeing an influx of retail money. Gangnam, in particular, is hot with the reconstruction projects getting a lot of attention,” said Lee Nam-soo of Shinhan Investment.

As Gangnam has little space left for new homes, reconstruction of old apartment complexes into taller ones with additional units is virtually the only source of new home supply.

More presales of such rebuilt homes are to hit the market in the coming months, including Daelim Industrial’s Acro River View complex in Seocho and Samsung Construction & Trading’s Raemian in the Banpo area.

Prices of existing homes in Gangnam are also turning up sharply.

A Hyundai Apartment unit in the district of Apgujeong, with a floor space of 85 square meters, was recently sold at 1.85 billion won, its record high price, according to local reports.

The Hyundai Apartment is one of the complexes in the area scheduled for reconstruction.

The Korean authorities said Thursday that they will limit the development of additional residential areas and scale down the supply of new apartments by state-owned Korea Land and Housing Corp., as part of the measures to curb the home loans.

By Lee Sun-young (milaya@heraldcorp.com)