[Practical Finance] Must Get Married to Buy a Home?..."Apply for Special Housing after Marriage Registration"

With the reform of the subscription system to encourage marriage and childbirth, the movement of the 20s and 30s generation trying to secure their own homes is becoming active. As the Korea Real Estate Board's subscription homepage, which had temporarily stopped operation for the reform, reopened, the supply volumes whose sales schedules were delayed are expected to pour out starting this month. Starting with the special supply (hereinafter referred to as special supply) of 'e-Pyeonhansesang Seodaejeon Station Centro' in Jung-gu, Daejeon, which will open the door to spring sales on the 5th, a flood of supply volumes is expected.

Disappeared 'Marriage Penalty'... Increase in Subscription Account Holders Also Expected

The core of this subscription system reform is the elimination of the 'marriage penalty.' The government revised the system to resolve the widespread phenomenon of avoiding marriage registration due to the reason that 'subscription opportunities decrease.' A representative example is that even if one spouse has won a subscription before marriage or has a history of owning a house, the other spouse can apply for the newlywed couple or first-time homebuyer special supply. However, if the spouse owns a house at the time of special supply subscription, it must be disposed of. Since the basic purpose of the subscription system is to support housing for non-homeowners, the condition that all household members must be non-homeowners during special supply must be observed.

The regulation that disqualified both spouses if they won overlapping subscriptions for special supply or general supply in regulated areas has disappeared. If both spouses apply for the same apartment subscription and win simultaneously, the person who applied first maintains the winning qualification. The threshold for multi-child special supply has been lowered from 'households with three or more children' to 'households with two or more children.'

The income criteria for dual-income couples in public sale special supply have also been relaxed from 140% to 200% of the average monthly urban worker income. Previously, dual-income couples with a combined annual income of about 120 million KRW could apply for public special supply, but now dual-income couples with an annual income of about 160 million KRW can also apply.

In the private housing point-based subscription system, incentives are also given to couples. The subscription account holding period points of the spouse (up to 3 points) can be combined for subscription. However, the combined score cannot exceed the maximum score (17 points). If the individual has already reached the maximum score by holding the account for a long time, this has little significance.

There is an analysis that the subscription system reform is leading to an increase in subscription account holders. According to the subscription homepage, as of the end of February, the number of subscribers to the Housing Subscription Comprehensive Savings was 25,563,099, an increase of 1,723 from the previous month. This is the first increase in 20 months. The number of subscription account holders recorded an all-time high of 27,031,911 at the end of June 2022, then decreased for 19 consecutive months from July that year to January this year (25,561,376). According to a survey on 'awareness of the housing subscription system' conducted by Station3, operator of the real estate information platform 'Dabang,' targeting 3,103 app users in January this year, among 1,578 respondents in their 20s and 30s, 1,188 (75.3%) held subscription accounts, and among them, 467 (39.3%) answered that the subscription system was 'ineffective.'

Pregnant and Childbirth Households Have Advantage... Expectations for April Sales Market Grow

View of an apartment complex in Seoul city. / Photo by Yonhap News

With the doors of special supply wide open to couples, consumers need to carefully consider favorable categories as the allocation volumes are adjusted. Public sale housing 'New:Home' allocates up to 35% of the supply to the newly established 'newborn special supply' category, and public rental housing prioritizes 10% of total households to childbirth households. In the private sector, 20% of the volumes allocated to existing first-time homebuyer and newlywed couple special supplies are dedicated to newborn special supply.

For example, 'e-Pyeonhansesang Seodaejeon Station Centro,' which starts sales on the 5th, supplies 86 households for newlywed couple special supply and 42 households for first-time homebuyer special supply. Among these, 17 households in the newlywed couple special supply and 8 households in the first-time homebuyer special supply are preferentially allocated to pregnant and childbirth households when selecting winners. Pregnant or childbirth couples have an advantage over those who are not.

Meanwhile, the market expects a warm-up as a large volume of spring sales is scheduled this month in addition to the subscription system reform. According to Zigbang, 45 complexes nationwide will be supplied with a total of 40,825 households this month. Among them, 34,091 households will be general sales. Compared to the same month last year, the total number of households increased by 169%, and general sales increased by 186%. By region, 14,196 households will be supplied in the metropolitan area (Seoul 1,066 households, Gyeonggi 8,821 households, Incheon 4,309 households), and 26,629 households in provincial areas.

Ham Young-jin, head of the Real Estate Research Lab at Woori Bank, said, "About 36% of married households are expected to gain incentives for home ownership through childbirth," adding, "Korea is a country with unprecedented low birth rates worldwide, and government policies inevitably focus on favoring childbirth households in subscription, loans, and housing supply related to home ownership."