The Patchwork Cheongyak System Fixed Bit by Bit... "It's Time to Change Now"

14th Restructuring Under Current Government... Repeated Revisions Each Time
Too Complex for Both Users and Experts to Understand
Need to Change Structure as Housing Types and Price Gaps Have Changed
Experts: "A More Comprehensive System Should Be Created After Review"

Perspective View of Suwon Maegyo Station Prugio SK View

[Asia Economy Reporter Moon Jiwon] The 'subscription system' introduced to supply new housing fairly and rationally is being criticized for becoming a 'patchwork' due to continuous short-term revisions. Since the government has not fixed the fundamental structure that inevitably causes side effects and only slightly changes figures and criteria according to the situation, the system has become so complex that it is difficult for both consumers and experts to understand immediately.

According to the Ministry of Land, Infrastructure and Transport and the industry on the 2nd, the government plans to reform the subscription system this year by increasing the ratio of preliminary winners from the existing 40% to 300% and applying a residency obligation period to special supply quantities. The intention is to increase preliminary winners to prevent multi-homeowners from 'picking up' through non-ranked subscriptions and to ensure that as many housing rights as possible go to those without homes.

However, the dominant analysis is that the effect will be limited. In fact, since the Moon Jae-in administration took office in 2017, the subscription system has been revised 14 times, each time causing various side effects. As the price ceiling system for sale was expanded, the gap between sale prices and market prices widened, spreading 'lottery sales.' After the point system was strengthened, problems arose such as people in their 30s with fewer dependents and shorter periods of being homeless being excluded from the subscription market.

Because of this, a new term 'Cheongpoja' (those who gave up on subscription) has emerged, especially among people in their 30s who find it difficult to win subscriptions. The system, which was originally introduced to distribute housing fairly, is failing to fulfill its role. Although there is special supply for youth and newlyweds, the quantity itself is small, so more people in their 30s are either buying expensive existing apartments with debt or focusing on a small number of non-ranked subscriptions.

The increasing difficulty and complexity of the subscription system is also a problem. This is because successive governments have frequently used the subscription system as a tool to adjust the real estate market. Established in 1978, this system has been revised over 140 times in 42 years. As a result, the number of intermediaries providing various consultations such as 'how to increase subscription points' and 'how to get loans for sale rights' has increased, raising concerns about the spread of incorrect information.

Kwon Il, head of the research team at Real Estate Info, said, "Due to the subscription reform cards hastily brought out by the government focusing only on fragmented parts, an unprecedentedly complex subscription system has been created worldwide," adding, "Because short-term regulations are repeated, even if the subscription market cools down temporarily, problems quickly resurface repeatedly."

Many experts analyze that it is time to review the overall framework of the subscription system. In particular, there are many calls to update the 'Housing Subscription Point System,' introduced in 2007 to assign differential scores based on the period of being homeless, number of dependents, and subscription account subscription period, to match the latest residential trends.

Under the current system, even if a person owns dozens of lands or commercial buildings but no houses, they are classified as homeless, making it easier to win subscriptions than those who own a low- to mid-priced single house. Also, since the number of dependents holds a very important weight in the points, popular sale areas such as Seoul and Suwon in Gyeonggi Province are dominated by people in their 40s and 50s. Although the number of single-person households in their 20s and 30s is increasing, the subscription system still remains in the past, favoring certain groups.

Kim Deokrye, head of the Housing Policy Research Office at the Korea Research Institute for Housing and Urban Affairs, emphasized, "The subscription system was created to establish criteria for fair and rational distribution in a situation where many people need housing, but now the market situation has changed significantly, including differences in housing types and regional sale prices, so it seems time to make overall adjustments," adding, "After reviewing distribution principles, a more multidimensional system should be created."

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