"Half-Price Apartment" Magok Land-Lease Main Subscription Delayed by Two Months [Real Estate AtoZ]

First Main Subscription Complex, Mortgage Product in Preparation
"Discussing Mortgage Product Launch with the Ministry of Land"
Move-in Date Also Adjusted to August Next Year

Seoul Housing & Communities Corporation (SH) has postponed the main subscription period for the Magok land-lease housing complex, which had been promoted as a "half-price apartment," by two months. This decision was made to recalculate the sale price and to prepare new loan products.

Perspective view of Magok Complex 17. Provided by SH

According to SH and Seoul City Council member Choi Jinhyuk on December 2, the main subscription for Magok Complex 17 (formerly Complex 10-2), which was originally scheduled for this month, has been delayed to February next year. The expected move-in period has also been adjusted from July to August next year.

SH explained that the timing of the main subscription was changed because it needs to recalculate the estimated sale price before the main subscription and prepare a separate loan product due to stricter lending regulations. SH stated, "Relevant agencies, including the Ministry of Land, Infrastructure and Transport, are currently proceeding with the process to launch a loan product for land-lease housing, and an announcement will be made once the product details are finalized."

Land-lease housing refers to homes where the public sector retains ownership of the land and only the building is sold to individuals. These homes are characterized by lower sale prices compared to private sector apartments. Under this system, a lease agreement for the land is signed for up to 40 years, and the land is rented to the owner. This complex accepted preliminary subscriptions in September 2023, with the sale price for a 59-square-meter unit set at 311.19 million won and the monthly land lease fee at 697,000 won. At that time, the competition ratio for general supply was 133 to 1.

When the sale price is recalculated for the main subscription, it is highly likely that the new price will be higher than the previous estimate. The previous estimate for this complex was calculated using the standard construction cost announced in March 2023. The most recently announced standard construction cost, as of September, is 2,174,000 won per square meter, which is an 11.89% increase (231,000 won per square meter) compared to 2 years and 9 months ago (1,943,000 won per square meter).

A separate loan product is expected to be prepared for the main subscription of land-lease housing. SH has continuously requested the introduction of a special mortgage product for newlyweds and young people, who may otherwise forgo the main subscription. This product would allow loans of up to 500 million won, with a loan-to-value (LTV) ratio of up to 80%, a 40-year term, and interest rates ranging from 1.9% to 3.0%. It is a product that can avoid the government's strong loan regulations implemented this year. The policy loan limits for programs such as Didimdol and Bogeumjari loans have been reduced from 400 million won to 320 million won in the Seoul metropolitan area.

Choi Jinhyuk, a member of the Seoul Metropolitan Council, stated, "Land-lease housing must be supplied with separate mortgage products to ensure that buyers do not face difficulties securing funds due to lending regulations," and added, "Since the Ministry of Land, Infrastructure and Transport has also been reviewing the introduction of such mortgage products, I will urge them to proceed without any issues."

Meanwhile, the next land-lease housing complexes scheduled for main subscription after Magok Complex 17 are: Godeok Gangil Complex 3 (August 2026), Magok Complex 16 (February 2027), and Wirye A1-14 Complex (July 2027). Including Magok Complex 17, SH has supplied a total of four complexes with 1,623 units. SH is also considering converting land-lease housing units that did not go through preliminary subscription into the Mirinae Jib program or similar alternatives.