[7·10 Real Estate Measures] Introduction of First-Time Special Supply for Private Housing... Increase in Income Criteria for Newlywed Special Supply

Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, is delivering opening remarks at the "10th Emergency Economic Central Countermeasures Headquarters Meeting" held at the Government Seoul Office in Jongno-gu, Seoul, on the 10th. Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Lee Chun-hee] The government has announced a series of measures to appease people in their 30s, who have been alienated in the subscription market and triggered 'panic buying.' Going forward, the special supply for first-time homebuyers will be expanded to include private housing, and the income criteria, which sparked controversy over 'gold spoon' privileges, will be relaxed. Acquisition tax will be fully exempted for houses priced at 150 million KRW or less.

On the 10th, Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, announced these measures during a briefing after the 10th Emergency Economic Central Countermeasures Headquarters meeting held at the Government Seoul Office, saying, "We could not help but empathize with the earnest concerns of people in their 20s and 30s who worry that it is becoming increasingly difficult to own a home."

According to the 'Supplementary Measures to Stabilize the Housing Market' announced that day, the special supply for first-time homebuyers will now be implemented for private housing as well. For the first time, 15% of public housing sites and 7% of private housing sites will be allocated for homes under 85㎡ (exclusive area). The proportion of special supply for first-time homebuyers in national housing, which was previously 20%, will also be raised to 25%.

The income criteria for national housing will maintain the existing standard of 100% of the previous year's average monthly urban worker income (5.55 million KRW for a three-person household). However, for private housing, it will be expanded to 130% (7.31 million KRW for a three-person household).

The special supply for newlyweds did not see the anticipated increase in proportion. Instead, the income requirements have been relaxed. It appears the government has accepted criticism that newlywed couples with realistic home-buying capacity are often excluded from income criteria unless they are 'gold spoon' privileged.

Accordingly, the income criteria for the general portion of the special supply for newlywed couples in private housing, which was previously 120% of the average monthly urban worker income (130% for dual-income households), will be expanded to 130% (140% for dual-income households) for first-time homebuyers. The public sale of newlywed hope towns will also be increased to the same level.

Acquisition tax will also be reduced. Previously, the government had provided a 50% acquisition tax reduction for first-time homebuyers on houses priced at 300 million KRW or less, but this benefit was only applied to couples married for less than five years.

Going forward, first-time homebuyers will also receive acquisition tax reduction benefits, and the 300 million KRW threshold will be expanded to 400 million KRW in the metropolitan area. Houses priced at 150 million KRW or less will be fully exempted from acquisition tax in all regions.

In the area of strengthening rental loan support, the interest rates on the policy loan called the Betimok Loan will be lowered. Currently, the interest rate for the youth Betimok Loan is between 1.8% and 2.4%, and it will be reduced by 0.3 percentage points. Additionally, the loan limit will be increased from the existing deposit limit of 70 million KRW to 100 million KRW, and the support limit will be raised accordingly. The interest rate for the general Betimok Loan, which is between 2.1% and 2.7%, will also be lowered to the same level.

The pre-sale volume of the 3rd phase new towns will also be significantly expanded. Initially, the government announced it would supply 9,000 households in the 3rd phase new towns through pre-subscription starting next year. This will be expanded beyond the 3rd phase new towns to include public housing sites, aiming to promote pre-subscription for more than 30,000 households.