Seoul Housing Subscription 'Unbeatable for 30s' Becomes Reality... Winning Cutoff Rises 65% in 4 Years

Rep. Kim Sang-hoon: "Moon Administration's Real Estate Policy Raised Entry Barriers, Pushed Up Housing Prices"

[Asia Economy Reporter Kim Hye-min] People in their 30s are being marginalized in the Seoul apartment subscription market. This is because the subscription winning cutoff score (minimum score) has risen by about 65% over four years, raising the entry barrier even higher. This year, the minimum score has increased to 52.5 points, leading to concerns that it has become virtually impossible for people in their 30s to secure an apartment through subscription in Seoul.

On the 23rd, according to the 'Housing Subscription Point System Winning Status' received by Kim Sang-hoon, a member of the People Power Party, from the Ministry of Land, Infrastructure and Transport, the average winning score in Seoul rose from 49.29 points in 2017 to 61.75 points this year, an increase of 25% (12.46 points) over 3 years and 8 months.

The winning cutoff score, that is, the minimum winning score, rose even more sharply. The minimum winning score increased from 31.72 points to 52.5 points, a 65% (20.78 points) rise. This contrasts with the nationwide minimum score, which rose by 5.95 points (from 24.89 points to 30.84 points) during the same period. The gap between the national average and Seoul widened significantly from 6.83 points in 2017 to 21.66 points this year.

Housing Subscription Point System Winning Status from 2017 to August 31, 2020 (Provided by Office of Assemblyman Kim Sang-hoon)

The subscription point system, one of the methods for supplying new apartments, allocates apartments in order of the highest subscription points, which are calculated by summing the number of dependents, the period of being without a home, and the subscription savings account subscription period. The structure inherently disadvantages younger applicants. The maximum score a 39-year-old head of a household supporting a family of four can receive is 57 points. For people in their 30s to exceed 60 points and be within the winning range, they would need to have three or more children or live with their own or their spouse’s parents. This means that most people in their 30s do not even meet the minimum winning score.

In particular, the Seoul subscription market has shown an abnormally overheated trend, raising the entry barrier for people in their 30s even higher. The Ministry of Land, Infrastructure and Transport explains that the winning rate for people in their 30s in Seoul over 3 years and 8 months reached 22.81%, indicating a significant proportion, but it appears that this proportion is clearly decreasing over time.

[Image source=Yonhap News]

Representative Kim said, "As housing prices continue to rise, the anxiety that prices might rise further has triggered demand, leading to an increase in subscription points," adding, "It is becoming increasingly difficult for people in their 30s to own a home."

He continued, "This is a failure of the Moon Jae-in administration’s real estate policy, which did not consider the desire to own a home," and criticized, "Despite the situation in the subscription market, Minister Kim Hyun-mi has made remarks disconnected from reality, such as saying 'It’s unfortunate that people are borrowing to the limit (Yeongkkeul)' and 'Wait for new town subscriptions.'"