All the excitement over new apartments in the "Pan'gyo New Town" has come and gone. 467,000 people rushed to get into 9,428 apartments 25.7 pyeong and smaller. It was a massive frenzy over contracts to buy new apartments, as those whose names are chosen stand to make hundreds of millions of won in marginal profit. In the meantime, no one seems to be paying much attention to the agony of those who weren't even able to participate.
The competition was actually less than had been anticipated. The Ministry of Construction and Transportation and real estate insiders all said that half of everyone in the capital region who qualified (according to their installment standing) would join in the process. In fact, it was only one out of five. People need to take an introspective look at why so many people gave up on an opportunity you wouldn't want to miss. Part of it has to be the reduced demand resulting from the resale restrictions that began ten years ago. Some people probably let the opportunity pass by because they live so far away. Those factors, however, were anticipated. The reason predictions were off has to be found elsewhere.
Despite the "prime cost linkage program," the average price of a pyeong was W11.76 million. Most units are between 32 and 34 pyeong in size, and were priced at W400 million. Even those who get mortgage loans of W150 million will still have to pay up W250 million, and even if those loans can be paid over periods of twenty years, that is still W1.25 million a month. A lot of people did the numbers, then turned and walked away with tears in their eyes. Everyone needs to take note of the theory that the reason the Ministry of Construction and Transportation and real estate experts were wrong in their predictions was because a lot of people had the same reaction.
The problem is the way prices have skyrocketed since self-regulation. Prior to the financial crisis of 1997 the average prices of an apartment in Seoul was W5 million a pyeong, but already in the first quarter of 2006 it is more than W15 million. If prices aren't reduced one way or another, a large number of "common people" will remain estranged from the system. Housing policy officials need to reflect anew on the harsh realities common people have to face, as seen through the events of Pan'gyo. Those who say the whole process should be left to the market should also take another look at the nail that has been driven into the chests of the common citizen.
The Hankyoreh, 21 April 2006.
[Translations by Seoul Selection]
[Editorial] 'Pan'gyo Craze' Left Many Behind |
