[The Editors' Verdict] Rather Than a 'Blind Subscription' Jackpot...

"It's a lottery, but you have to apply even if you don't have money."

A friend of the author, who said he had a good dream the night before, made this statement while applying for the non-priority subscription for one household (exclusive area 84㎡) at ‘Lotte Castle Dongtan’ in Hwaseong-si, Gyeonggi-do on the 29th of last month. A total of 2,944,780 people, including him who owns one house, applied for the subscription to get one household. Due to the flood of applicants, the application website ‘Chungyak Home’ was paralyzed. The application period was even extended by one day to accept more applications.

This was the largest crowd in the history of subscription applications. In February, 1.01 million people applied for three households at The H Prestige I-Park in Gangnam-gu, Seoul, setting the previous record, which has now been surpassed. The competition rate also exceeded the 829,000 to 1 ratio recorded in June last year at Heukseok Xi in Dongjak-gu, Seoul.

Six percent of South Korea’s population applied to get this apartment. It is difficult to see most of their goal as securing a home. It is more likely for speculative gains. The sale price of this apartment is 482 million KRW. On the other hand, according to the Ministry of Land, Infrastructure and Transport’s real transaction price disclosure system, the exclusive 84㎡ unit in this complex was traded for 1.455 billion KRW last month. Although there is a three-year resale restriction, it applies from the date of the first winner announcement, so resale is possible. There is no obligation for actual residence, so if the buyer pays 20% of the contract deposit on the 9th and the remaining 80% within two months, they can sell it. This means about 1 billion KRW in speculative profit can be made. The sale price is currently at the level of the apartment’s jeonse (long-term deposit lease), so ‘zero won’ investment is possible. After the subscription schedule was announced, posts asking about resale restrictions or loan conditions flooded real estate-related internet communities, with short comments like ‘Just apply first and think later’ being posted.

The non-priority subscription has become a ‘blind subscription.’ However, it is impossible to label the 2.94 million applicants as speculators. The government created a ‘10 billion KRW speculative gain’ lottery that anyone over 19 years old can apply for, so it cannot be said that writing one’s name on it is wrong. The government is responsible for both the low sale price in the 400 million KRW range and the creation of the non-priority subscription system that anyone can apply for. This apartment was sold in 2017 under the price ceiling system, which set the sale price in the 400 million KRW range. In this situation, the government abolished the non-homeowner and residence requirements for non-priority subscriptions in February last year, turning it into a lottery anyone can apply for. Last year, before the non-priority subscription for Dunchon Jugong (Olympic Park Foreon), known as the largest reconstruction complex since the founding of Korea, the government relaxed the non-priority requirements. This complex, which had about 899 unsold units and a high possibility of unsold inventory, succeeded in selling out due to the relaxation of non-priority requirements. About 40,000 subscription accounts flooded in, recording a highest competition rate of 655 to 1.

The author’s friend who applied this time ultimately did not become a winner. He was not discouraged. He said he did not have high expectations because he applied for the money. Perhaps the 2.94 million people including him felt similarly.

Should the dream that the government must fulfill be their subscription jackpot? Shouldn’t it be the home ownership of ordinary people who cannot even apply due to lack of funds despite this subscription frenzy? If the non-priority qualifications had been raised, even one household would have been perfectly allocated to a non-homeowner. Above all, wouldn’t it have been a good example presenting the government’s firm direction of ‘allocating even one more household to ordinary people’? It is time to reconsider the subscription system reform that has fallen into a lottery.