Prospective Applicants' Frustration... October Subscription Account Net Increase Drops to 60,000-Level

Rising Winning Thresholds and Loan Regulations Slow Growth
Subscription Savings Account 'Uselessness'... Demand Diversion to Officetels Also Affects
Seoul Area Increase Limited to 1,658 People... 84.7% Decrease from Previous Month

[Asia Economy Reporter Ryu Tae-min] The net increase in subscribers to the Housing Subscription Savings Comprehensive Account (Subscription Account), which had been approaching 100,000 per month on average, sharply dropped to the 60,000 range last month. This is believed to be because the winning cutoff scores for apartments in popular areas such as Seoul have soared to nearly full marks based on a typical family of four, and with the addition of loan regulations, it has become practically difficult for new subscribers to expect winning. The demand has also been dispersed as officetels and urban-type residential housing, which do not require subscription accounts, have gained popularity, which is interpreted as affecting the slowdown in subscriber growth.

According to the Korea Real Estate Board's Subscription Home as of the 18th, the total number of subscription account holders nationwide was counted at 28,312,587 last month. Although the number of subscription account holders is still increasing, the net increase has noticeably decreased compared to 97,117 in the previous month. Compared to the increase of 139,685 in the same month last year, the growth rate dropped by 56.1%.

The increase in subscription account holders has particularly slowed significantly in the Seoul area. Last month, the net increase in subscription accounts in Seoul was only 1,658, which is just 15.3% of the 10,895 recorded in the previous month. Elsewhere, Gyeonggi recorded 22,750, Incheon 2,597, and the five major metropolitan cities 7,062, showing an overall decrease in subscriber growth compared to the previous month.

The nationwide slowdown in subscription account growth is interpreted as an effect of loan regulations. Song Seung-hyun, head of Urban and Economy, explained, “As loan regulations have made it difficult to obtain interim payment loans, demanders who intended to purchase homes with loans are finding it harder to secure funds, reducing their expectations.”

Another major cause is the spread of the notion that subscription accounts are useless, especially among the 20s and 30s generations, as the threshold for winning subscriptions keeps rising. No matter how steadily points are accumulated, the cutoff score for winning has become so high that homeownership through subscription is practically considered impossible. Accordingly, demand among young people has been dispersed to officetels and urban-type residential housing, which do not require subscription accounts, which also seems to have had an impact.

However, there is also an opinion that the growth appears to have slowed due to a base effect because those who would subscribe to subscription accounts have mostly already done so. In fact, the number of account holders was 25,624,715 in January last year, and it has surged by nearly 2.7 million in one year and nine months. This means that three out of every five people in the population have subscription accounts.

Experts advised that it is more advantageous to increase the payment amount and keep the subscription account rather than canceling it. Ham Young-jin, head of the Zigbang Big Data Lab, said, “Maintaining a subscription account allows you to aim for pre-subscription or various special supply types, and there are many benefits such as the ability to receive pre-gifts. Even if it is not immediately necessary, the possibility of changes in the subscription system in the future will increase its usability.”