[Beginner's Guide to Burin] The Real 'Lotto' Has Appeared... The World of 'Jupjup' That Attracts Hundreds of Thousands as Soon as It Emerges

'26 Million People Flock to 3 Units of "Acro Seoul Forest" Drop Sale

"Drop Sale" Means Non-Sequential Sale of Remaining Units Due to Undersubscription, Disqualification, or Contract Cancellation

No Restrictions Like Point System or Non-Homeowners, Anyone Adult Can Participate

Disqualified or Cancelled Units Supplied at Prices from Several Years Ago
Guaranteed Minimum Several Billion Won Market Price Difference

[Asia Economy Reporter Lee Chun-hee] When you become a real estate reporter, you sometimes get unexpected KakaoTalk messages from friends. "How do I apply for a housing subscription?" "What does first priority mean?" For the 2030 'Burin-i (Real Estate + Beginner)' who only have subscription accounts their parents opened when they were young, I am trying to create a guide.

One of the hottest terms in the recent real estate market is 'Jupjup' (non-priority subscription). On the 20th, the non-priority subscription for 'Acro Seoul Forest' in Seongdong-gu, Seoul, attracted a staggering 264,625 applicants. Since only 3 units were supplied, the competition rate was nearly 90,000 to 1.

If you have been reading the Burin-i guide on how to own a newly built apartment before moving in, you can easily name three methods. The most common method is sale (subscription), then the sale of the right to purchase (pre-sale rights transaction), and finally the purchase of a membership unit with confirmed move-in before sale (move-in rights transaction).

Jupjup is a type of subscription but differs somewhat from the usual subscription. It is a supply of leftover units without any restrictions through a lottery when there is under-subscription or when the winner has issues with eligibility or financing.

Last year, 'Jupjup' gained explosive popularity. Since the subscription system was strengthened in 2018, apartments under 84㎡ (exclusive area) in speculative overheated districts like Seoul are required to be supplied entirely by a point system. However, in the first half of last year, as the real estate market cooled, prices rose, and loan regulations tightened, the subscription market froze. Consequently, cases of winners giving up their winning due to financing concerns became frequent.

As a result, complexes failed to sell out even after filling all preliminary winners. Previously, individual construction companies handled these leftover units on their own, but as fairness controversies arose, the government mandated in February last year that complexes in speculative overheated districts with 20 or more leftover units must conduct non-priority subscriptions through the subscription site (then Apartmenttoyou). Construction companies even started accepting non-priority subscriptions before the main subscription as part of pre-marketing, fueling the 'Jupjup' craze.

Moreover, anyone aged 19 or older living in the metropolitan area could apply regardless of subscription account status, making it a regulatory-free zone for point systems and non-homeowners, which naturally attracted high interest. For example, the 'Taereung Harrington Place' in Nowon-gu held in February last year had a competition rate of 61.9 to 1, and the 84㎡ units saw a rate as high as 365 to 1.

As concerns about market overheating through 'Jupjup' grew, the government introduced a subscription reform plan allowing up to 500% preliminary winners, and as the sale market revived, non-priority subscriptions through leftover units virtually disappeared.

Aerial view of 'Acro Seoul Forest' in Seongdong-gu, Seoul. (Provided by Daelim Industrial)

However, cases of losing eligibility after subscription or giving up due to payment issues still occur, so 'Jupjup' continues to exist. A representative example is 'Gongdeok SK Leaders View' in Mapo-gu, which held a subscription for just one unit in May last year. Although it was an apartment sold in 2017, a contract cancellation occurred, and the subscription was held again after two years. This site also attracted 46,931 applicants for one unit, causing the website to crash and the subscription deadline to be extended from 5 PM to 6:30 PM.

The immense popularity of Gongdeok SK Leaders View and Acro Seoul Forest is closely related to the recent surge in the real estate market. When a subscription must be held again due to contract cancellation or disqualification, the sale price must be set the same as the original sale price. Both places saw nearby market prices soar 2-3 years after sale, and since the original sale prices were usually set below market prices, huge capital gains were expected.

In May last year, the sale price of Gongdeok SK Leaders View was 882.4 million KRW for 97㎡. However, the nearby 'Gongdeok Park Xi' had smaller 84㎡ units trading between 1.3 to 1.4 billion KRW, so a minimum capital gain of 500 million KRW was expected. Similarly, the smallest 97㎡ unit among the 3 supplied at Acro Seoul Forest was priced at 1.741 billion KRW, while nearby 'Trimage' 84㎡ units recently traded between 2.3 to 2.9 billion KRW, allowing capital gains of 600 million to 1 billion KRW.

Such 'Jupjup' is criticized as a feast for the cash-rich. Since the move-in date is near, the time to prepare funds is tight. For Acro Seoul Forest, winners must immediately pay a 10% deposit of the sale price upon announcement on the 28th. With move-in scheduled for December, the time to prepare funds is tighter than other complexes. Essentially, it is a feast only for the wealthy who can raise tens of billions of KRW within a few months.