[Beginner's Guide to Real Estate] In the New Year, 'Owning Your Home'... Carefully Check the Changing Subscription System

[Asia Economy Reporter Lee Chun-hee] When you become a real estate reporter, you often get unexpected KakaoTalk messages from friends. "How do I apply for a housing subscription?" "What is first priority?" For the 2030 'Burin-i (real estate + beginner)' who only have subscription savings accounts created by their parents when they were young, I am going to create a guide.

At the beginning of the new year, many people make wishes for the new year. One of the most common wishes is to 'own a home.' Among the ways to own a home, the simplest method is definitely the housing subscription system. In fact, for the 2030 generation, aiming for the point-based subscription was not easy, and last year the term 'Cheongpoja (subscription quitters)' emerged. However, from this year, changes in the subscription system for the 2030 generation, such as an increase in special supply, will take place. Today, I will look into the key points you must check to aim for winning a subscription this year, reflecting these changes.

The most noticeable change in this year's subscription is the relaxation of income requirements for special supply. Until now, the 2030 generation, already burdened by the general supply point system, found it difficult to win even in special supply due to low income requirements. From this year, the income requirements for special supply will be significantly relaxed to address this issue.

For newlywed special supply in private housing, the income standard, which was up to 120% of the previous year's average monthly income by household size of urban workers (130% for dual-income households) until last year, will increase to up to 140% (160% for dual-income households) from this year. For public housing, the existing 100% (120% for dual-income households) limit will be relaxed to 130% (140% for dual-income households) this year.

The income criteria for the first-time homebuyer special supply will also be raised. The previous income limits of 100% or less for public housing and 130% or less for private housing have been relaxed to 130% or less for public housing and 160% or less for private housing.

However, since the existing special supply system was primarily designed to provide smooth housing supply to low-income and other vulnerable residents, 70% of the supply quantity will be 'prioritized supply' based on the existing income requirements. The remaining 30% will be supplied by lottery to those who meet the increased income requirements and those who failed in the prioritized supply.

Next, starting from the 19th of next month, there will be regulations that must not be forgotten when winning a subscription. When winning an apartment under the price ceiling system, a residence obligation is imposed. Depending on the sale price compared to nearby market prices, public land requires actual residence for 3 to 5 years from the initial move-in date, and private land requires 2 to 3 years of residence. If the residence obligation period is not fulfilled, a prison sentence of up to one year or a fine of up to 10 million KRW may be imposed. Additionally, when moving during the residence obligation period, the property must be sold preferentially to the Korea Land and Housing Corporation (LH) or similar entities.

Since it will no longer be possible to resolve the balance payment by receiving tenants on a lease basis timed with the completion date, those aiming for subscriptions must plan their finances more carefully. However, in cases of unavoidable circumstances such as overseas stays, work, livelihood, schooling, or medical treatment in other regions during the residence obligation period, if confirmed by LH, it can be recognized as residence in the relevant housing.

Also, the long-awaited 'pre-subscription' for major metropolitan area sites including the 3rd phase new towns will finally begin. The government plans to sequentially conduct pre-subscriptions starting from 1,100 units in Incheon Gyeyang in July, followed by Namyangju Wangsuk, Bucheon Daejang, Goyang Changneung, and Hanam Gyosan districts in September.

Pre-subscription is a system that selects winners for some units 1 to 2 years before the main subscription. The eligibility criteria for subscription, including income and asset standards, are the same as those for the main subscription. One point to note is that the residency requirement, which grants first priority subscription status only after residing in the area for a certain period, allows application if the applicant is registered as a resident in the area at the time of pre-subscription. However, by the time of the main subscription, the residency period must be fulfilled. Also, the requirement to be a non-homeowner must be maintained until the main subscription.

This year, many complexes that could not be supplied due to the price ceiling system will be released in large numbers. Leading the mammoth-scale reconstruction complexes is the 12,000-unit Dunchon Jugong reconstruction in Gangdong-gu, Seoul, followed by Seocho-gu Banpo-dong's 'Raemian One Bailey' (Sinbanpo 3rd & Gyeongnam), Bangbae 5 and 6 districts, and Jamsil Jinju Apartments in Songpa-gu, all scheduled for supply within this year.

However, a phenomenon contrary to the government's recent intention to significantly raise prices through the price ceiling system has occurred. The sale price of Raemian One Bailey was set at an unprecedented 56.68 million KRW per 3.3㎡, marking the highest price per 3.3㎡ ever recorded. Unlike the government's control of prices around 48.91 million KRW per 3.3㎡ in Seocho and Gangnam districts since 2019, prices have surged under the ceiling system.

Nevertheless, the industry generally evaluates this record-high price as still a 'lottery subscription.' According to this, the sale price for an 84㎡ (exclusive area) unit in Raemian One Bailey is expected to exceed 1.8 billion KRW. However, considering that the actual transaction price of the adjacent 'Acro River Park' 84㎡ unit soared to 3.7 billion KRW, it is still about half of the market price.