Announcement of Ministry of Land's Special Supply System Reform
Increasing Winning Opportunities for Single-Person Households and Childless Newlyweds
30% of Existing Quota Selected by Lottery
18,000 Households Scale... General Supply Remains Unchanged
View of apartments in the Gangnam area of Seoul from Daemosan Mountain, Seoul [Image source=Yonhap News]
Unmarried single-person households and newlywed couples without children or with high incomes will also have a chance to win the 'First-Time Homebuyer and Newlywed Special Supply (Special Supply)'. Currently, the special supply allocation is determined based on the number of children, income, and marital status, making it virtually impossible for childless couples or single-person households to win. In response, the government plans to increase the chances for young people, who previously could not even apply, by converting some of the supply into a lottery system.
On the 7th, the Ministry of Land, Infrastructure and Transport announced a 'Partial Reform Plan for the First-Time Homebuyer and Newlywed Special Supply System' that includes these changes. The reform plan aims to provide special supply application opportunities to single-person households and households exceeding income criteria, and to introduce a lottery system for newlywed special supply to expand winning chances for childless newlyweds. The revised regulations are expected to apply to housing complexes recruiting residents from November onward.
30% of First-Time and Newlywed Special Supply to be by Lottery... Approximately 18,000 Households
Specifically, 30% of the first-time homebuyer and newlywed special supply will be provided through a relaxed criteria lottery system. Considering that about 60,000 units of private newlywed and first-time special supply were supplied last year, the number of units subject to the lottery system is expected to be about 18,000 households (12,000 for newlyweds and 6,000 for first-time buyers). This accounts for 9% of the total special supply units on public land. If the total supply increases, the lottery units will also increase.
Currently, only married households or those with children can apply for the first-time homebuyer special supply, but single-person households will now be allowed to apply. However, single-person households can only apply for housing units of 60㎡ or less. The current first-time special supply is provided only to those who have no history of home ownership, have paid income tax for more than five years, and have an income of up to 160% of the average monthly income of urban workers. However, since eligibility is limited to 'currently married' or 'households with children,' there have been many criticisms that single-person households cannot apply despite having no home purchase experience.
Additionally, dual-income households exceeding the current income criteria will also be given the opportunity to apply for newlywed and first-time special supply. Currently, only those with income below 160% of the standard can apply, so this measure addresses complaints from dual-income couples working at large or medium-sized companies who could not even apply. Since the income standard of 160% for families of three or fewer is about 9,648,256 KRW per month, the Ministry of Land expects a significant increase in eligible applicants.
However, households exceeding the 160% income requirement must pass an asset standard to apply. This is to restrict so-called 'gold spoon special supply.' If the value of owned real estate excluding jeonse deposits exceeds 330 million KRW, application is not allowed. In market value terms, this is about 500 million KRW.
The relaxed criteria apply only to private housing, which accounts for most (about 90%) of the supply of sale housing and is highly preferred by consumers. Public housing (public sale) is excluded to prioritize low-income and multi-child households. Accordingly, the public sale newlywed Hope Town is not affected by this reform plan.
70% of Units to be Prioritized for Existing Waiting Applicants... General Supply Units Remain Unchanged
To accommodate existing waiting applicants for newlywed and first-time special supply, 70% of the units will be prioritized for them, and the remaining 30% will be allocated by lottery among households who failed to receive priority supply and newly included applicants. Reflecting the recent trend of planning childbirth after securing a home, the number of children will not be considered in the 30% lottery units for newlywed special supply.
The proportion of general supply (point system), which tends to favor people in their 40s and 50s, will remain unchanged. Therefore, it is expected that the reform will not reduce the chances of winning for households that have maintained long-term non-homeownership. However, since the special supply units are currently heavily allocated to young people such as newlyweds, complaints about the relatively small absolute number of sale units for middle-aged and older adults are expected to continue.
A Ministry of Land official said, "With this reform of the special supply system, we expect to absorb demand from young people who have been marginalized in the subscription market and have turned to the established resale market into new subscription demand," and "We will immediately begin revising related regulations and expand subscription opportunities for young people starting with private housing pre-subscriptions to be expanded from November onward."
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