[Beginner's Guide to Buying] If You're Tired of the Subscription Wall, Aim for 'Boryuji' Available for New Move-In

Reserved Quantity 'Boryuji' Held Back for Omissions, Errors, or Litigation
Popularity Maintained Despite High Sale Prices as Housing Prices Rise Consecutively

[Asia Economy Reporter Lee Chun-hee] When you become a real estate reporter, you often get unexpected KakaoTalk messages from friends. "How do I apply for a housing subscription?" "What does first priority mean?" For the 2030 'Burin-i (Real Estate + Beginner)' who only have subscription accounts created by their parents when they were young, I am trying to create a guide.

As the private land price ceiling system is about to be fully implemented, the value of reserved units in newly built apartments is rising day by day. Reserved units are quantities that the reconstruction or redevelopment association, as the project implementer, withholds without selling some households to prepare for omissions, errors, or lawsuits involving the sales targets. Up to 1% of the total number of households can be reserved.

If the quantity is less than 30 households, it is sold through bidding to the highest bidder. The biggest advantage is that no subscription account is needed and multi-homeowners can also participate. Moreover, bidding is usually possible at about 100 million KRW lower than the nearby market price, attracting many investors.

However, as apartment prices have surged recently, associations have started to reflect this in advance by setting reserved unit prices above market prices. Nevertheless, due to concerns about supply contraction and low-score applicants exhausted by ever-increasing winning points, the popularity of reserved units is rising as more people challenge the bidding.

At the end of last month, in the bidding for reserved units at 'Boramae SK View,' a reconstruction project in Shingil 5 District, Yeongdeungpo-gu, Seoul, an 84㎡ (exclusive area) unit was sold for 1.411 billion KRW. The association set the expected sale price at 1.33 billion KRW, and considering that a similar-sized pre-sale right was traded for 1.2341 billion KRW in November, this was evaluated as not a cheap price compared to the market. However, all five 84㎡ units put up for sale were bid at prices 27 million to 81 million KRW higher than the expected sale price, and among the four 59㎡ units, all but one were sold. Despite the 84㎡ pre-sale price being in the high 600 million KRW range, the bidding price was more than double, showing considerable popularity.

Furthermore, as concerns about reduced new apartment supply increase after the implementation of the price ceiling system, competition for reserved unit bidding is expected to intensify. Also, since resale restrictions on pre-sale rights, which were previously only until move-in, now apply up to 10 years after move-in for complexes under the ceiling system, the number of newly built units available for immediate move-in will inevitably decrease. This is a reason to pay attention to reserved units that will be available for immediate move-in in a few months.

▲ Recent sale announcement of 'The H Honor Hills' in Gaepo-dong, Gangnam-gu, Seoul, where the sale of reserved land was recently conducted (Provided by Seoul City)

There are three main ways to find information about reserved unit sales. For reserved units supplied in Seoul, the association is required to post bidding announcements on the 'Clean Up System,' a maintenance project information site operated by Seoul City. If you are interested in a complex nearing move-in, it is necessary to check regularly. Another way is to directly inquire at the association office or carefully check sale announcements in newspapers.

However, it is important to note that financing can be difficult. Usually, a deposit of around 50 million KRW is required at bidding, and 10% of the contract price must be paid immediately at the time of contract. Mid-term loans are not possible. Moreover, since the move-in date is near, the period to pay the remaining balance is often tight. For example, in the case of Boramae SK View, the bidding result was announced on the 24th of last month, the contract was signed a week later on the 31st, and the remaining balance had to be paid by the end of March.

The reserved unit market is likely to grow further. Although up to 1% can be reserved, the original purpose of the system was to prepare for possible 'accidents,' so from the association's perspective, it was better to leave only the minimum and sell all units considering financial costs.

However, following the Housing and Urban Guarantee Corporation (HUG)'s control of high pre-sale prices and the expansion of the private land price ceiling system in April, the profitability of maintenance projects has started to be negatively affected, changing the situation. Industry experts believe that associations will likely secure reserved units up to the 1% limit to maximize profitability, expecting significant capital gains later, even if they have to bear related financial costs.

This content was produced with the assistance of AI translation services.