As 'Half-Price Apartments' Subscription Booms... 9,000 Units to Be Supplied Over 2 Years

Seoul Housing and Communities Corporation (SH Corporation) announced on the 20th at the National Assembly Members' Office Building in Yeongdeungpo-gu, Seoul, that it plans to supply 9,000 units of land leasehold sale housing, known as "half-price apartments," throughout Seoul by next year. This increase in supply appears to be a response to the high demand seen in the pre-reservation for the Godukgangil 3rd Complex, which is being supplied under the land leasehold method.

Land leasehold sale housing, referred to as "half-price apartments," is a system where the public sector owns the land, and the ownership of buildings and other structures is acquired by the buyers. Residents can live for 40 years and can renew the contract for another 40 years, allowing a maximum residence period of 80 years.

The expected sale price for the Godukgangil 3rd Complex in Gangdong-gu, Seoul, built under this method, is 355 million KRW for a 59㎡ (exclusive area) unit, with an estimated monthly land lease fee of 400,000 KRW. This is about half the price compared to the Gangdong Riverst 4th Complex in Gangil-dong, where the asking price for the same area is around 800 million KRW. The recent pre-reservation recorded a high competition rate of 67:1 for general supply and 33.1:1 for special supply, the highest among recent private and public sales. For the newly introduced youth special supply, 8,871 applicants competed for 75 units, resulting in a competition rate of 118.3:1.

On the morning of the 20th, at the National Assembly Members' Office Building, a commemorative photo was taken at the "Discussion on Revitalizing Land Lease Sale Housing." (Front row from the right) Kim Heon-dong, President of SH Corporation; Lee Won-jae, Vice Minister of the Ministry of Land, Infrastructure and Transport; Lee Jong-bae, member of the People Power Party; Yoo Chang-soo, Deputy Mayor for Administration of Seoul; Ban Young-woon, Professor of Urban Engineering at Chungbuk National University; Na Min-hee, Head of Housing Supply Planning Team at the Ministry of Land, Infrastructure and Transport; (Back row from the right) Jo Jeong-heun, Chair of the Land and Housing Committee of the Citizens' Coalition for Economic Justice; Lee Jae-soo, Professor of Real Estate at Kangwon National University; Jeong Jong-dae, Director of Seoul Housing Policy Support Center; Song Seung-hyun, CEO of City and Economy; Cheon Seong-hee, Director of SH Urban Research Institute. Photo by Seoul Housing and Communities Corporation

Cheon Seong-hee, Director of SH Urban Research Institute, who presented the topic, evaluated that "the transparent disclosure of the sale cost and the possibility of home ownership at an affordable level are factors behind the popularity." Director Cheon estimated the potential demand for land leasehold housing at 371,000 units. This figure was calculated based on the number of households without homes that meet income and asset requirements, using the Godukgangil 3rd Complex as a reference. Director Cheon stated, "Among these, about 125,000 households are estimated to be able to afford housing costs," and added, "In response to demand, we plan to supply 9,000 units in the short term."

Director Cheon also said, "Starting with the Godukgangil 3rd Complex, we plan to continue expanding the supply of land leasehold housing," and added, "We will simultaneously improve the system by partially recognizing capital gains or allowing tenants to choose between monthly or advance payment of rent."

In the subsequent discussion, Song Seung-hyun, CEO of City and Economy, said, "Land leasehold housing has a low initial burden, so it is likely to attract young people who are slow to accumulate wealth," but emphasized, "Since this system was introduced to reduce housing costs and stabilize housing for the working class, benefits like a 'lottery' should not be given to specific groups."

Professor Lee Jae-su of the Department of Real Estate at Kangwon National University advised, "It is important to move beyond the binary thinking of whether land leasehold sale housing is rental or sale and to provide diverse housing options for vulnerable residents," and added, "Institutional support is necessary for the SH land leasehold sale housing model to be successfully established."