Lifetime First-Time Special Supply Increasing by 20,000 Households Annually, Still Insufficient in Seoul

[Asia Economy Reporter Yoo In-ho] The number of special supply units for first-time homebuyers, including newlyweds, is expected to increase by about 20,000 units annually.

This is due to the government's decision to increase the proportion of special supply for first-time homebuyers under the July 10 real estate measures. However, in Seoul, the increase in first-time supply units is analyzed to be only around 1,200 units.

According to the Ministry of Land, Infrastructure and Transport (MOLIT) and the Democratic Party on the 20th, MOLIT recently projected through government-party consultations that the additional supply of special units for first-time homebuyers included in the July 10 real estate measures will be about 20,000 units per year.

Special supply is a system that sets aside units separately for first-time homebuyers, newlyweds, and multi-child families. Apartments priced over 900 million KRW in speculative overheated districts are excluded, and it only applies to small units of 85㎡ or less.

Through the July 10 measures, the government plans to newly introduce special supply for first-time homebuyers in private housing to guarantee housing subscription opportunities for young people, and increase the special supply ratio for first-time homebuyers in national housing from 20% to 25%.

For private housing, 15% of units in public land such as new towns and 7% in private land will be newly allocated as first-time homebuyer units. Currently, the special supply ratio totals 43%, including 20% for newlyweds, 10% for multi-child families, 10% for institutions, and 3% for elderly parent support.

Reflecting this revision of the special supply for first-time homebuyers, MOLIT estimated based on last year’s supply that special supply units for private housing will increase by 18,291 units nationwide. The metropolitan area will have 8,760 units including 1,176 units in Seoul, and 9,531 units will be added in other regions.

For national housing, raising the special supply ratio to 25% is estimated to increase units by 2,338. In the metropolitan area, 399 units including 32 in Seoul, and 69 units in other regions will be additionally allocated. National housing refers to units of 85㎡ or less built by the state, local governments, public institutions, or supported by the Housing and Urban Fund.

The special supply for first-time homebuyers operates purely by lottery. Regardless of age, anyone who meets certain income and asset criteria and is a first-time homebuyer without a house can participate, and winners are decided only through a lottery.

MOLIT expanded the eligibility for special supply for first-time homebuyers while somewhat relaxing the income criteria. The newly established income standard for private housing special supply for first-time homebuyers is set at 130% or less of the average monthly income of urban workers. For this year, 130% of the average monthly income for a four-person household is 8.09 million KRW, which translates to an annual salary of 97.08 million KRW, allowing such applicants to apply for the special supply.

However, in Seoul, even combining private and national housing, the increase in special supply units for first-time homebuyers is only about 1,200 units, leading to criticism that the government’s supply expansion plan is merely for show.

Moreover, as the special supply units increase, the general supply units decrease, which is expected to continue the controversy that this takes away opportunities from long-term non-homeowners with subscription savings accounts.

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