From March, Multi-Child Special Supply Criteria Relaxed from 3 to 2 Children
Comparison and Analysis of Subscription Complexes in Seoul, Asan, Jeonju, etc.
Post-Reform Subscription Complexes See Competition Rates Increase Up to 100 Times
Effect of Dispersing Demand from Newlyweds and First-Time Homebuyers Also Observed
As the special supply eligibility for multi-child households was expanded from families with three or more children to those with two or more children, the competition rate for special supply for multi-child households has significantly increased. The demand for special supply for multi-child households has surged as more applicants seek to increase their chances of securing a home through apartment subscriptions. This influx of childbirth households into the multi-child special supply has also had the effect of dispersing demand that was previously concentrated on newlyweds and first-time homebuyers special supply categories.
On the 21st, Asia Economy analyzed six complexes in three regions?Seoul, Asan in Chungcheongnam-do, and Jeonju in Jeollabuk-do?through the Korea Real Estate Board’s subscription website, and found that the competition rate for multi-child special supply rose sharply following the relaxation of child number criteria.
One complex from each region was selected for comparison, with similar numbers of units for sale and subscription periods around March 25. The Ministry of Land, Infrastructure and Transport allowed households with two or more children to receive special supply for multi-child households for both private and public housing starting March 25 this year. Previously, only families with three or more children were eligible for this special supply. This measure was taken to broaden homeownership opportunities for childbirth households.
Competition Rate for Multi-Child Special Supply Increased
In Seoul, a comparison was made between ‘Seodaemun-gu Gyeonghuigung Ubora (108 units)’, which offered special supply on March 4, and ‘Gwangjin-gu Gangbyeon Station Central I-Park (68 units)’, which held subscriptions on the 10th of this month. For Gyeonghuigung Ubora, 13 applicants applied for 8 multi-child special supply units, whereas Gangbyeon Station Central I-Park saw 759 applicants competing for 5 units. In terms of competition rate, Gangbyeon Station Central I-Park (151.8 to 1) was nearly 100 times higher than Gyeonghuigung Ubora (1.63 to 1).
This phenomenon was also observed outside the metropolitan area. On January 3 this year, ‘The Sharp Tangjeong Infinity City (1,140 units)’ in Asan, Chungnam, had 115 applicants for 112 multi-child special supply units, resulting in a competition rate of 1.02 to 1. In contrast, ‘The Sharp Tangjeong Infinity City Phase 2 (1,050 units)’, which held subscriptions on the 7th of last month, attracted 174 applicants for 93 units, recording a competition rate of 1.87 to 1.
In Jeonju, Jeollabuk-do, ‘Seosin The Sharp Vivaldi (1,225 units)’, which held subscriptions on February 26, recruited 122 multi-child special supply units and received 211 applications, resulting in a competition rate of 1.72 to 1. Meanwhile, ‘Eco City The Sharp Phase 4 (576 units)’, which held subscriptions on the 3rd of this month, saw 1,614 applicants competing for 56 units, recording a competition rate of 28.8 to 1. The competition rate for complexes where the criteria were relaxed was more than 20 times higher.
According to the Ministry of Land, Infrastructure and Transport, the average nationwide competition rate for multi-child household special supply over the past three years (2021?2023) was 0.7 to 1, indicating undersubscription. A ministry official explained, "Although the subscription market is generally sluggish, we expect the competition rate for multi-child types to rise slightly due to the relaxation of criteria."
Effect of Dispersing Special Supply Demand
The relaxation of the multi-child special supply criteria also brought about an effect of dispersing demand. Some of the demand that was heavily concentrated in categories such as newlyweds and first-time homebuyers shifted to the multi-child category. For example, the competition rate for the newlywed category at The Sharp Tangjeong Infinity City Phase 2 (2.74 to 1) was lower than that of The Sharp Tangjeong Infinity City (3.16 to 1), and in the first-time homebuyer category, the competition rate at The Sharp Tangjeong Infinity City Phase 2 (4.02 to 1) was also lower than that of The Sharp Tangjeong Infinity City (6.1 to 1).
Park Jimin, head of the Monthly Subscription Research Institute, explained, "Relaxing the eligibility requirements for multi-child special supply in response to the low birthrate situation is proving effective. While competition in the newlywed and first-time homebuyer categories has somewhat eased, the number of applicants for the previously undersubscribed multi-child category has increased, resulting in a dispersion of demand."
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