[Beginner's Guide] Next Year's 'Pre-Subscription' Starts... How to Win?

30,000 Pre-Subscription Units Next Year and in 2022

'Prime' Units in 2022... Seoul Supply and Increased 3rd New Town Units
Income and Asset Criteria Based on Pre-Subscription... Residency Period Based on Main Subscription

Over Half for Newlyweds and First-Time Special Supply... General Sale Based on 'Total Payment'
If Targeting Only One 3rd New Town, Consider Relocating Residence

Note Possible Move-In Delays Due to 'Pre-Subscription' Characteristics

[Asia Economy Reporter Lee Chun-hee] When you become a real estate reporter, friends sometimes suddenly message you on KakaoTalk. "How do I apply for a 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 going to create a guide.

On the 8th, the government finally unveiled a blueprint related to 'pre-subscription'. Pre-subscription is a method of receiving subscription applications 1 to 2 years ahead of the usual subscription timing (main subscription). The government plans to supply a total of 60,000 households in the metropolitan area through pre-subscription, with 30,000 households in the second half of next year and 30,000 households in 2022. Today, we will find out where and how much will be supplied, how to increase the chances of winning, and what to be cautious about.

'Prime' supply will be in 2022... 4,300 households planned in Seoul

The most eye-catching locations are Seoul and the 3rd New Towns. According to the current government plan, 200 households are scheduled near Noryangjin Station military site in Seoul next year, and in 2022, a total of 4,300 households will be supplied, including Yongsan Maintenance Depot (3,000 households), which is considered the core location in the recent supply plan, as well as Godeok Gangil (500 households), Gangseo (300 households), Magok (200 households), and Eunpyeong (100 households). Tae-neung Golf Course and Camp Kim, whose schedules are not yet confirmed, are also planned to supply a certain amount through pre-subscription, so the supply volume may increase further.

The supply volume of the 3rd New Towns is also expected to be higher in the first half of 2022 than in the second half of next year. In the second half of next year, a total of 9,700 households are planned, including Namyangju Wangsuk (3,900 households), Goyang Changneung (1,600 households), and Hanam Gyosan (1,100 households). In 2022, a larger number of 12,500 households will be recruited through pre-subscription, including Namyangju Wangsuk (5,000 households), Goyang Changneung (2,500 households), and Hanam Gyosan (2,500 households).

Pre-subscription is conducted somewhat differently from the main subscription. Different calculation points are applied for related eligibility requirements. Income and asset requirements are evaluated based on the pre-subscription timing, not the main subscription. Even if the criteria are exceeded at the main subscription stage after pre-subscription, it does not matter if the applicant passed at the pre-subscription stage.

Currently, in speculative overheated districts or large-scale land development districts over 660,000㎡, to be eligible for priority supply, one must have resided in the relevant local government area for more than 2 years to qualify for first priority subscription in that area. However, the residency period requirement only needs to be met by the main subscription. At the time of pre-subscription, it is sufficient to be residing in the relevant area or the metropolitan area to apply.

The biggest advantage of pre-subscription is that restrictions on re-winning do not apply, providing stable opportunities for actual demanders. In general subscriptions, once you use your subscription savings account and win, whether you contract or give up, you are restricted from applying for other housing subscriptions for up to 10 years from the winning date. In contrast, with pre-subscription, even if you win, you can apply for other subscription houses with better conditions that appear within 1 to 2 years. If you succeed in another subscription and give up the pre-subscription, there is no particular disadvantage. However, if you win a pre-subscription, you cannot apply for multiple pre-subscriptions simultaneously, even if they are conducted at different times, so this must be kept in mind.

More than half supplied through special supply for newlyweds and first-time homebuyers

This pre-subscription is supplied 100% as public sale. According to the current subscription system, 85% of public sale supply is allocated to special supply, and only 15% is general supply. Especially, among the special supply, 30% of the total volume is allocated to newlyweds, and 25% to first-time homebuyers, so 30-40-year-old Burin-i can also aim to win.

The special supply for newlyweds selects winners based on a point system considering marriage duration, number of children, and residency period in the relevant area. Shorter marriage duration, more children, and longer residency are advantageous. However, most newlyweds who actually have the capacity to purchase a house find the special supply for newlyweds to be 'out of reach' because 75% of this is preferentially supplied to households with income below 100% of the previous year's urban worker average monthly income (120% for dual-income households).

This income criterion causes many households with actual purchasing power to fail the income requirement, which has been pointed out as one of the factors causing 'panic buying'. However, Minister Kim Hyun-mi of the Ministry of Land, Infrastructure and Transport stated, "There are many cases where points are low but dual-income causes income requirements to be unmet, creating obstacles," and "We plan to relax income requirements further to give opportunities to newlyweds with low points who have difficulty winning," so there is still a possibility of changes in the system.

The first-time homebuyer special supply is supplied 100% by lottery. However, somewhat strict conditions apply. If you are single or divorced, you cannot apply unless you have children. According to the current 'Housing Supply Rules,' only those married or with children as of the announcement date of the resident recruitment notice are eligible to apply.

Also, even if you have a spouse or children, new employees cannot apply for the first-time homebuyer special supply. Only workers or self-employed persons with more than 5 years of work experience can apply. The income criteria are applied the same as for the newlywed special supply. However, since the income criteria relaxation for dual-income households does not apply, meeting the requirements is more difficult, causing dissatisfaction.

Finally, asset criteria are also imposed. As of this year, the total value of real estate assets including land and buildings must be 215.5 million KRW or less, and if owning a car, its value must be 27.64 million KRW or less.

For general supply, winners are selected based on 'accumulated payment amount' rather than the usual 84-point 'subscription point system' used in sales. This is to benefit those who have consistently saved in their subscription accounts every month. However, only 100,000 KRW per month is recognized. Even if you deposit 200,000 KRW monthly for 10 years totaling 24 million KRW, only 12 million KRW is recognized, the same as someone who deposited 100,000 KRW monthly. In other words, winning eligibility is granted in order of those who have consistently deposited at least 100,000 KRW for a long time.

Should I move for pre-subscription? ... Effective if targeting only one place

To increase the chance of winning pre-subscription, moving to the relevant area is an option. Some quick movers are already considering relocation. Currently, in Gyeonggi Province, residing in the relevant city or county is advantageous for subscription. Especially for this pre-subscription, since the residency requirement only needs to be met at the pre-subscription time by residing in the area, and the 1-2 year residency requirement can be fulfilled by the main subscription timing, this strategy can be more effective.

Currently, in large-scale land development districts over 660,000㎡ within speculative overheated districts in Gyeonggi Province, 30% of the general supply is preferentially allocated to those who have resided in the relevant basic local government for more than 2 years. The remaining 70% is allocated 20% to other Gyeonggi residents and 50% to other metropolitan area residents. Unlike Seoul and Incheon, which allocate 50% preferentially to metropolitan local governments and 50% to the rest of the metropolitan area, considering the number of applicants and allocated households, the chance of winning is higher.

Moreover, since large-scale land development district sales in speculative overheated districts allocate 30% preferentially to residents of the relevant city or county, and even if you lose, you continue to compete in other areas, effectively giving 'three subscription opportunities,' the chance of winning for residents in the relevant Gyeonggi area increases overwhelmingly.

In fact, in the general supply of 'Gwacheon Prugio Bellarte' in Gwacheon Knowledge Information Town, which held subscription in July, the average competition rate for the relevant area (Gwacheon City) was 18.4 to 1, with 1,936 applicants for 105 households. This is somewhat different from the recent metropolitan subscription market where triple-digit competition rates are common.

However, for other Gyeonggi and other metropolitan area residents, similar competition rates appeared. Other Gyeonggi had 24,847 applicants including losers from Gwacheon for 70 households, showing an average competition rate of 355 to 1, nearly 20 times that of the relevant area. Other metropolitan areas had 45,264 applicants including losers for 175 households, showing 269 to 1.

Similarly, 'Gwacheon Jade Xi,' which held subscription in February, showed a competition rate of 31.9 to 1 for Gwacheon City residents with 1,276 applicants for 40 households, but other Gyeonggi had 477 to 1, and other metropolitan areas had 392 to 1, showing a sharp rise in competition.

The threshold for winning is also evaluated to be easier for residents of the relevant city or county to surpass. In Gwacheon Jade Xi, where winners were selected based on total subscription payment amount, the minimum payment amount (cut-off) for Gwacheon City residents ranged from 17.4 million to 21.7 million KRW depending on the unit size, meaning winning was possible with 14 years and 6 months of subscription payments. However, for 59㎡A, the cut-off rose to 26.46 million KRW for other Gyeonggi and 23.36 million KRW for metropolitan areas, requiring 19 years and 8 months to over 22 years of payments to win.

Given the unusually low competition rates and payment amounts in the recent metropolitan subscription market, renting and residing in the relevant area for 2 years can make it easier to secure a home in a good location. For non-homeowners, this is a subscription method worth trying.

However, if you prefer living in Seoul, since land development districts under 660,000㎡ in Seoul are supplied 100% to Seoul residents, there is a high possibility of missing other opportunities. Therefore, unless you are targeting only one of the 3rd New Towns, this may not be a good strategy, so you should carefully consider where you want to apply.

Risk of delayed move-in... More than half gave up on 'Bogeumjari Housing'

However, it is uncertain whether move-in will occur within 5 years after pre-subscription as planned by the government. In the case of the Bogeumjari Housing project in Hanam Gam-il District, which held pre-subscription 10 years ago, 3 out of 7 complexes have not yet been occupied. The earliest occupied block, B7, only started move-in in June last year, at least 4 years later than originally scheduled.

The project was delayed because pre-subscription was conducted before compensation procedures were completed, and during development, as many as 52 Baekje-era tombs were discovered, causing some sites to be converted into historical parks, reducing the project scale and causing delays.

According to data submitted by the Korea Land and Housing Corporation (LH) to Rep. Yoon Kwan-seok of the Democratic Party in October last year on 'Pre-reservation status of sale housing,' only 41% (5,512 people) of the total 13,398 pre-reservation applicants for Bogeumjari Housing, including Gam-il District, actually received supply.

However, the government claims that this pre-subscription is being prepared differently to avoid repeating past mistakes of the Bogeumjari Housing project. To this end, the government plans to conduct pre-subscription only after land compensation and related issues are settled. For Hanam Gyosan District, where concerns about cultural relics were raised, only areas with very low possibility of relic discovery were selected after sufficient investigation.

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