[Beginner's Guide to Apartment Hunting] 'Maegyo Station Lotto' Blocked... Changes in Subscription Laws with the 2·20 Measures

Different Subscription Regulations by Regulatory Area
Adjustment Target Areas Tightly Restricted by This Regulation
Lottery Ratio Remains the Same but Resale Restrictions and LTV Regulations Strengthened

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

On the 20th, the '2·20 Real Estate Measures' were announced. The core of the measures was to designate the entire areas of Suwon, Anyang, and Uiwang cities in Gyeonggi Province as regulated areas.

If you are a 'Burin-i' who was preparing to apply for housing in these areas, this news must be quite confusing. There are many other regulations, but especially regarding housing subscriptions, the loan-to-value ratio (LTV) on mortgage loans in non-regulated areas has been reduced from 70% to 50%, and the resale restriction period for pre-sale rights is limited to until move-in. To put it simply, the mid-term payment loan is now only available up to 50%, and pre-sale rights cannot be resold until move-in.

With various regulations applied differently by region and changing with each measure, it is already a task for Burin-i just to check the related regulations. Today, I will explain which regions these regulations currently apply to and what regulations exist.

The government currently designates overheated areas as 'regulated areas.' In order of the strength of regulations, it goes 'Speculative Area' ＞ 'Speculative Overheated District' ＞ 'Adjusted Target Area.' Since the strength of regulations is Adjusted Target Area < Speculative Overheated District < Speculative Area, you can assume that regulations applied in Adjusted Target Areas are always applied more strictly in Speculative Overheated Districts and Speculative Areas.

In Seoul, currently the entire area is a Speculative Overheated District, and among them, 15 districts are Speculative Areas. However, regarding housing subscriptions, there is not much difference between these two regulations. The biggest regulation related to housing subscriptions in these areas is the 100% point-based supply system.

If you have been following the Burin-i guide so far, you probably know the difference between the point-based system and the lottery system well. In Speculative Areas, Speculative Overheated Districts, and metropolitan public housing districts, all housing units under 85㎡ (exclusive area), which is called 'national housing size,' must be supplied 100% by the point-based system during subscription.

In other areas, even for units under 85㎡, from 25% (in overheated subscription areas) up to 100% lottery supply is possible at the discretion of the local government head. However, in Seoul, which is a Speculative Overheated District, the lottery system is completely blocked for small and medium-sized housing. Since the point-based system selects winners by ranking among the homeless based on the length of homelessness and the number of dependents, one-house owners or young people in their 20s and 30s will find it increasingly difficult to secure a home in Seoul through housing subscriptions. For housing units over 85㎡, 50% are supplied by lottery. On the other hand, in Adjusted Target Areas or non-regulated areas, all housing units over 85㎡ are supplied 100% by the point-based system.

This difference was also the background for the explosive subscription applications for 'Maegyo Station Prugio SK View' in Paldal-gu, Suwon-si, Gyeonggi Province, which received subscriptions on the 19th. This complex had 1,074 units available and attracted 156,505 applicants, recording an average competition rate of 145.7 to 1. Paldal-gu, Suwon-si, where this complex is located, is an Adjusted Target Area where 60% of units under 85㎡ and 100% of units over 85㎡ are supplied by lottery. Many one-house owners and young people who were blocked by the high subscription barrier inevitably flocked here.

The wide first-priority area also contributed to the popularity of this complex. Housing subscription eligibility is granted if you have been registered as a resident in a certain area for more than one year. This first priority is divided into the relevant area and other areas. For Maegyo Station Prugio SK View, first-priority subscription was possible not only in Suwon-si, the supply area, but also in the entire metropolitan area including Seoul, Gyeonggi, and Incheon through other areas. As a result, 81,991 people applied from within Suwon-si, and 74,514 applied from other areas, setting an unprecedented number of applicants.

Also, the short resale restriction period was analyzed as a factor in the popularity of this complex. In Speculative Overheated Districts, resale of pre-sale rights is prohibited until move-in (ownership transfer registration date). However, although this complex is in an Adjusted Target Area, resale is freely possible six months after the announcement of winners. Paldal-gu was already designated as an Adjusted Target Area, but the resale restriction periods differed among Adjusted Target Areas. In Adjusted Target Area 1, resale is restricted until move-in. However, in Area 2, resale restriction is lifted 18 months after winning, and in Area 3, it is lifted 6 months (private land) to 12 months (public land) after winning.

Until now, Paldal-gu, Suwon-si was grouped as Area 3 along with Hanam, Namyangju, Goyang (private land), and Giheung-gu, Yongin-si, allowing resale six months after winning. However, through the 2·20 measures, the government decided to upgrade the regulation of these five areas and Seongnam-si (private land), which was Area 2, to Area 1, completely blocking resale restrictions.

Also, through the 2·20 measures, Adjusted Target Areas faced significant restrictions on mid-term payment loans. If you visit model houses in Seoul, you can easily see notices saying 'Mid-term payment loans are only available up to 40%.' This is also due to the Speculative Overheated District regulations. Currently, in Speculative Areas and Speculative Overheated Districts, the loan-to-value ratio (LTV) for mortgage loans is limited to 40%. The regulation in Adjusted Target Areas, which was 60%, was reduced to 50% by the 2·20 measures. Due to the regulation, although the mid-term payment is 60%, applicants have to cover 10-20% themselves without loans.

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