"The Government Took Away My Chance to Buy Another Home": My House Disappeared with a Single Text Message [Inside Chodong]

No One Takes Responsibility for the Pre-Subscription System
Winners Left in Limbo as Projects Are Canceled or Delayed
Government’s Irresponsible Approach Deepens Public Distrust

"I gave up all other subscription opportunities, saved diligently, and waited...."

"I thought I wouldn't have to worry about housing anymore, but the government actually took away even the chance to buy (another) house."

The pre-subscription apartment project scheduled to be supplied in blocks 3 and 4 of Unjeong 3 District, Paju, Gyeonggi Province, was abruptly canceled. When the private developer could not find a contractor due to rising construction costs, they reportedly notified the cancellation of the project to about 400 households who had won the pre-subscription at the end of last month with a single text message. This complex attracted attention during the June 2022 pre-subscription as it was a prime location just 200 meters from Unjeong Station on the GTX A Line, a metropolitan express railway, resulting in a high competition rate. Earlier, in January this year, about 200 private pre-subscription winners in Gajeong 2 District, Seo-gu, Incheon, were also notified of contract cancellations.

The problem is that for these private pre-subscriptions, there are no protections for winners if the project is canceled or changed. The winners are simply invalidated, and their subscription savings accounts are restored. However, in the meantime, some winners may have canceled their subscription accounts, exceeded income criteria, or passed the special supply period for newlyweds, losing all the benefits they could have received when applying for other general apartment subscriptions.

Projects where the main subscription is delayed by as long as 2 to 3 years after the pre-subscription also cause distress to winners. In some cases, after many difficulties, the main contract is imminent, but the sale price has risen sharply due to repeated construction cost increases. For example, the A-3 block in Geumto District, Seongnam, Gyeonggi Province, which recently announced the main subscription, saw the sale price increase by 70 million KRW compared to the pre-subscription two years ago. The price is even higher than nearby newly built apartments, eliminating the meaning of the pre-subscription and the advantages for buyers.

As side effects continued to emerge, the government abolished the pre-subscription system in May this year, three years after reintroducing it in July 2021. Policies that are pushed through recklessly and ultimately officially abandoned tend to collapse. The progress of projects that completed pre-subscription has become even more uncertain. Nationwide, about 52,000 units have undergone public pre-subscription, but only 5% have proceeded to the main subscription. About half of the 45 private pre-subscription projects have failed to meet the main subscription schedule, causing setbacks. Winners of pre-subscriptions in 3rd New Towns such as Namyangju and Hanam, who are scheduled for the main subscription this September, are also anxious about receiving notices of project cancellation or delays.

The damage to pre-subscription winners is greater than it appears. To maintain their status as non-homeowners, they have given up other subscriptions or home purchases, while new apartment prices have skyrocketed. The sense of deprivation grows when considering not only the expectation of moving into their own home but also the opportunity costs lost by waiting endlessly. To maintain eligibility, they must remain non-homeowners until an uncertain move-in date, leaving them stuck in limbo.

Even if some give up midway, the government should have shown a more responsible attitude toward the projects previously promised. Irresponsible excuses such as "there are structural limitations in the pre-subscription system" or "the real estate market is not good" only increase market confusion and distrust in policies. Instead of calming the demand that initially aimed to "buy a house with debt," it has rather encouraged the sentiment of "I have to buy a house now." Pre-subscription winners, who sighed that the government only gave them endless "false hope," are now venting their frustration, saying, "Pre-subscription was a nationwide scam."