[Real Asset Strategy] Can You Secure a Han River Home and a 400 Million Won Profit Through Public Housing?

SooBangSa by the Han River Offers Over 400 Million Won in Potential Profit
Prime Location and High Competition Expected for General Type Units
Goduk Gangil Complex 3 and Others as Sharing Type
Affordable Options Anticipated to Attract Real Buyers with Limited Funds

The second round of advance applications for public housing, which allows homebuyers to purchase homes at prices lower than the market rate, will begin this month. This year, approximately 10,000 units will be available for advance application in prime locations across the Seoul metropolitan area, including the site of the Capital Defense Command (SooBangSa) in Dongjak-gu, Seoul, which offers views of the Han River. With prices 20-30% lower than surrounding market rates and rare inclusion of popular Seoul locations in public housing, the program is expected to attract significant interest from those without homes.

[Image source=Yonhap News]

According to the Ministry of Land, Infrastructure and Transport on June 14, a total of 10,076 units under the public housing program 'New:Home' are scheduled to be supplied this year. Advance applications will be conducted in three rounds: June (1,981 units), September (3,274 units), and December (4,821 units). There are three types of supply: 'Sharing Type' (5,286 units), which includes special supply for young people; 'Option Type' (2,440 units), which allows tenants to choose to purchase after six years of renting; and 'General Type' (2,350 units), which follows the existing public sale format.

SooBangSa by the Han River: Sale Price 870 Million Won... Over 400 Million Won in Potential Profit

The most notable site is the SooBangSa location in Dongjak-gu, Seoul, which will be supplied as a General Type. It is considered to have the best location among the advance application sites. Situated in Noryangjin-dong, Dongjak-gu, it offers views of the Han River. The site is a 'double station area' located between Noryangjin Station (Lines 1 and 9) and Nodeul Station (Line 9), and offers convenient access to Olympic-daero, Gangbyeonbuk-ro, and Hangang-daero, which is expected to result in high competition for applications.

However, the estimated sale price for the SooBangSa site is close to 900 million won, which is relatively high for public housing. The project consists of a single housing type with an exclusive area of 59 square meters, and the estimated sale price is set at 872.25 million won. As a General Type, it does not come with a dedicated mortgage. For newlywed couples or first-time homebuyers in their 20s and 30s, even if they use the existing Didimdol loan (up to 400 million won for newlyweds, up to 200 million won for first-time buyers), the high sale price makes it difficult to apply.

Nevertheless, the real estate industry expects the General Type to be popular because it is offered at about 80% of the market price and buyers are not required to share any capital gains. Considering that the most recent transaction for a 59-square-meter unit at Raemian Twin Park, adjacent to the SooBangSa site, was 1.36 billion won, successful applicants could expect a profit of over 400 million won.

The majority of the units will be allocated as special supply for newlywed couples and first-time homebuyers. By supply type, the special supply includes 25 units for large families, 51 for newlyweds, 51 for first-time buyers, 12 for those with elderly parents, and 37 for other categories (such as institutional recommendations), totaling 176 units. The remaining 30%, or 79 units, will be supplied as general supply. Of these, 20% (15 units) will be allocated by lottery, giving applicants with lower scores a chance to win. Advance application dates are June 19-20 for special supply (176 units) and June 21-22 for general supply (79 units). Winners will be announced on July 5. The main application is scheduled for September 15 next year, and move-in is expected in 2027.

Goduk Gangil Complex 3 and Others as 'Sharing Type'... Expected to Attract Real Demand with Limited Funds

Among the advance applications taking place this month, Goduk Gangil Complex 3, Namyangju Wangsuk, and Anyang Maegok will be supplied as Sharing Type. The Sharing Type is sold at less than 70% of the market price, and a portion of the capital gains is shared with LH, making it attractive to real buyers with limited funds. In addition, the Sharing Type allows buyers to borrow up to 80% of the sale price (up to 500 million won) at a low fixed interest rate (1.9%-3.0% per year) for up to 40 years, reducing the initial financial burden.

In particular, Goduk Gangil Complex 3 is a land-lease housing project, where the public sector owns the land and only the building is sold, resulting in a lower sale price as the land cost is excluded. It consists of a single 49-square-meter housing type, with an estimated sale price of 314.447 million won. According to the Ministry of Land's transaction price disclosure system, a 49-square-meter unit at the nearby Gangdong River Star Complex 4 was traded last month for 620 million won. The estimated sale price for Namyangju Wangsuk is between 263.87 million and 336.22 million won, and for Anyang Maegok, it is between 439.34 million and 543.56 million won.

The Ministry of Land has also announced the schedule for advance applications for public housing in the second half of the year. In September, Hanam Gyosan (452 units), Ansan Jangsaeng (439 units), and Seoul Magok 10-2 (260 units) will be supplied as Sharing Type. Notably, the Option Type, which allows tenants to decide whether to purchase after living with affordable rent for six years, will be introduced for the first time at Guri Galmae Station Area (300 units), Gunpo Daeyami (340 units), and Hwaseong Dongtan 2 (500 units). In December, Han River South (Sharing Type, 300 units), Daebang-dong Military Site (General Type, 836 units), Namyangju Wangsuk 2 (836 units), Magok Taxi Garage (210 units), Wirye A1-14 (260 units), and Goyang Changneung (400 units) are scheduled to be supplied as Sharing Type.

An industry insider commented, "The application process itself is expected to be successful. However, applicants should consider the possibility of delays in the main application or construction, as well as the fact that current prices are only estimates, and carefully weigh the potential for price increases at the time of the main application before deciding to apply."