Winners Reconsider Contracts as Real Estate Regulations Ease
Disadvantages of Giving Up Wins and Benefits of Deregulation Occur Simultaneously
[Asia Economy Reporter Kim Hyemin] As most real estate regulations in the Seoul area have been lifted, the winners of Olympic Park Foreon (Dunchon Jugong Reconstruction) have entered a final stage of deliberation. While some have decided to finalize their contracts, saying their worries have disappeared, many others seem to be hesitating due to concerns over high interest rates and the declining surrounding market prices.
According to the Korea Real Estate Board on the 6th, if winners ultimately give up their contracts, they will lose their subscription savings accounts, but their chances of applying for housing in Seoul remain valid. This is due to the easing of re-winning restrictions in Seoul following the lifting of real estate regulations.
Originally, all 25 autonomous districts in Seoul were designated as speculative overheated zones, and winners of housing subscriptions were subject to a 10-year re-winning restriction. This meant that houses supplied in speculative overheated zones could not be applied for through the point-based system for 10 years. This was an extraordinary measure introduced by the government during past housing price surges when the relatively low sale prices caused excessive subscription enthusiasm.
However, with 21 autonomous districts in Seoul now removed from the speculative overheated zones, the re-winning restriction has also been lifted. Since the regulation is based on the date of the resident recruitment announcement, the 10-year re-winning restriction remains for Olympic Park Foreon. However, except for the Gangnam 3 districts (Gangnam, Seocho, Songpa) and Yongsan-gu, which remain regulated areas, applications are now possible throughout the rest of Seoul. The houses eligible for subscription here refer to private housing. Although areas subject to the price ceiling system are also restricted from subscription like speculative overheated zones, since all except the Gangnam 3 districts and Yongsan-gu have been lifted this time, they are unaffected.
Of course, subscription savings accounts that have accumulated points so far cannot be used. New subscription savings accounts must be opened. It should also be considered that first-priority subscription is not immediately possible. In the metropolitan area, a subscription savings account must have been held for at least one year to qualify for first-priority subscription. The deposit amount must also be between a minimum of 3 million KRW and a maximum of 15 million KRW, depending on the area, in the subscription savings account.
An official from the sales industry said, "The easing of the re-winning restriction applies not only to Dunchon Jugong but also to winners of Jangwi Xi Radiant, who have already proceeded with official contracts, and those of Gangdong Heritage Xi, who will soon proceed with official contracts," adding, "While subscription in Seoul is not completely impossible, one must accept that the points accumulated over a long subscription period will disappear, which may put them at a disadvantage in the point competition."
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