Confusion Among Public Pre-Subscription Winners Due to Project Delays
Ministry of Land, Infrastructure and Transport to Halt Pre-Subscription from This Year... After 34 Months
Support Measures for Deposit and Interim Payments if Delayed Over 6 Months
The public housing pre-subscription system, which had been in effect since July 2021, is effectively being abolished. Originally introduced to actively absorb housing subscription demand and secure early opportunities for non-homeowners with real housing needs to own a home, the project has caused inconvenience due to delays in the main subscription and move-in schedules.
On the 14th, the Ministry of Land, Infrastructure and Transport announced that it will suspend the pre-subscription implementation starting this year and plans to provide faster notifications to pre-subscription winners about delays in projects where pre-subscription has been completed but delays are unavoidable.
Delays in 7 Complexes Scheduled for Main Subscription in September-October
Korea Land and Housing Corporation (LH) Goyang Business Headquarters Public Relations Center / Photo by Yonhap News
Pre-subscription is a system that precedes the main subscription, conducted at the time of district unit plan approval to enable early supply of public sale housing (New:Home). It was introduced during the Moon Jae-in administration, when the real estate market was booming, as a measure to stabilize the market. However, since pre-subscription occurs before housing construction begins, if issues such as compensation or cultural heritage excavation arise during the district development process, the waiting time for pre-subscription winners until the main subscription and move-in is extended.
In the case of Block A2 in the Daeyami Public Housing District in Gunpo-si, Gyeonggi Province (a newlywed hope town), the main subscription schedule was postponed from the original date of the 15th of this month to the first half of 2027. The cause was the temporary relocation work of power transmission lines due to undergrounding. However, this fact became known about two weeks before the main subscription, causing controversy. Pre-subscription winners were thrown into confusion over issues such as rental contracts and loan interest burdens.
Accordingly, the Ministry of Land, Infrastructure and Transport decided not to implement further pre-subscriptions, and newly supplied public sale housing will proceed directly to the main subscription without pre-subscription. Additionally, in cooperation with the Korea Land and Housing Corporation (LH), a consultative body will be formed to support pre-subscription winners whose main subscriptions have been delayed to ensure their housing plans are not disrupted. Lee Jeong-hee, head of the Public Housing Promotion Division at the Ministry, said, "LH has been notifying delays 1-2 months before the main subscription, but from now on, we will transparently and promptly inform about the expected delay period and reasons. Among the eight complexes scheduled for main subscription in September-October, delays are expected in seven complexes with 5,667 households."
The seven complexes completed pre-subscription in October-December 2021 and July 2022, including newlywed hope towns supplied in the 3rd new towns such as Wangsuk 2 District in Namyangju-si and Juam District in Gwacheon-si. One complex proceeding with the main subscription as planned is the Seoul Dongjak-gu Capital Defense Command site, which had pre-subscription in June last year. The division head explained, "Although contaminated soil was found at the Capital Defense Command site, purification work can proceed simultaneously with construction, so the main subscription will proceed as scheduled. We are also investigating delays for complexes scheduled for main subscription after November and will provide specific delay periods between May and June after confirmation."
Support Including Adjustment of Deposit Ratio and Guidance on Jeonse Rental for Delays Over Six Months
Lee Jeong-hee, Director of the Public Housing Promotion Division at the Ministry of Land, Infrastructure and Transport, announced on the 13th at a briefing held at the Government Sejong Complex that the new public pre-sale will be suspended. / Photo by Yonhap News
The division head commented on the suspension of the pre-subscription system, which had been controversial since its introduction, saying, "When the period between pre-subscription and main subscription was short, issues such as price increases did not occur, but as the pre-subscription timing was moved earlier, the gap lengthened, causing problems. We judged that the harm to pre-subscription winners in terms of move-in and other aspects outweighed the positive effect of absorbing housing demand."
According to the Ministry, as of the end of last year, 99 complexes with about 52,000 households had completed pre-subscription nationwide. Among them, 13 complexes have completed the main subscription, leaving 86 complexes with about 46,000 households remaining. This year, 22 complexes with about 12,000 households were scheduled for main subscription.
The Ministry and LH will regularly check and manage the progress of each complex to resolve obstacles early and devise ways to shorten project periods to minimize waiting times for pre-subscription winners. Furthermore, for complexes where the main subscription is delayed by more than six months, they plan to actively support by adjusting the deposit ratio from 10% to 5% at the time of contract signing or reducing the number of interim payment installments from two to one. They will also strengthen guidance on jeonse rental housing.
The division head said, "If necessary, we plan to guide pre-subscription winners to find jeonse rentals near the complexes scheduled for main subscription," adding, "We have prepared measures to indirectly ease contract conditions considering housing cost burdens." He added, "We will not provide direct financial or interest support. We considered that pre-subscription winners can choose whether to participate in the main subscription, there are no restrictions on other general subscriptions, no disadvantages if they forgo the main subscription, and the sale price is confirmed at the time of the main subscription."
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