Dual-Income Couples Earning 100 Million Won Face "More Intense" Competition for Newlywed Special Housing Benefits...

Government Proposes 'Special Supply System Improvement' Plan to Expand Housing Supply Opportunities for Actual Demanders

Eased Income Criteria for Newlyweds and First-Time Special Supply
"Same Supply Volume... Winning Will Become More Difficult"

Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki is delivering opening remarks while presiding over the "8th Real Estate Market Inspection Meeting of Related Ministers" held on the 14th at the Government Seoul Office in Gwanghwamun, Seoul.

[Asia Economy Reporters Joo Sang-don (Sejong) and Moon Je-won] The government has decided to expand the target groups for special supply for newlyweds and first-time homebuyers. Although the intention is to provide more real demand groups with opportunities to own a home, the market is concerned that "expanding the target groups amid an already insufficient supply will further increase the already high competition rate for newlywed special supply."

On the 14th, the government discussed and finalized the "Special Supply System Improvement Plan to Expand Housing Supply Opportunities for Real Demanders" at the '8th Real Estate Market Inspection Meeting' chaired by Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki.

Currently, for private housing, the income criteria for newlywed special supply are as follows: 75% of the supply (priority supply) is for households with urban worker average monthly income at 100% (120% for dual-income households) or less, and the remaining 25% (general supply) is for those with 120% (130% for dual-income) or less. Going forward, the priority supply ratio will be lowered from 75% to 70%, maintaining the current income criteria, while the general supply ratio will increase to 30% with relaxed income criteria up to 140% (160% for dual-income). In this case, households with a pre-tax monthly income of up to 7.78 million KRW (8.89 million KRW for dual-income) for families of three or fewer will qualify for newlywed special supply. Converting 8.89 million KRW monthly income to annual salary equals approximately 106.68 million KRW. The income requirements for 30% of the first-time special supply will also be raised from public 100% or less and private 130% or less to 130% or less and 160% or less, respectively.

Contrary to the government's expectation that "real demanders will have more opportunities," experts see potential side effects. First, the already high competition rate for newlywed special supply is likely to increase further. According to Korea Real Estate Agency's Apply Home, the newlywed special supply for Hoban Summit Mokdong in Sinjeong-dong, Yangcheon-gu, Seoul, which was offered in April, had 5,536 applicants for 47 units, resulting in a competition rate of 117.78 to 1. Similarly, Heukseok River Park Xi in Heukseok-dong, Dongjak-gu, had 6,933 applicants for 15 units, recording a competition rate of 462.2 to 1. The average competition rate for general sales of this apartment was 95.9 to 1. Professor Shim Gyo-eon of Konkuk University’s Department of Real Estate said, "Since the supply volume remains the same, competition will become fiercer," and criticized, "It is a flawed supply method for the government to select recipients as if lining them up."

There are also concerns that expanding the special supply target could exacerbate instability in the jeonse (long-term lease) market. Lee Eun-hyung, senior researcher at the Korea Construction Policy Institute, said, "People with a certain level of subscription points and jeonse deposits may flock even more to 'lottery apartments' where they can expect several hundred million won in unearned income after winning." The government issued another warning message regarding market disruption on the same day. Deputy Prime Minister Hong said, "If illegal apartment resale is detected, buyers will face strong economic penalties, including losing buyer status, premium on pre-sale rights, and current market price gains." He added, "The first phase of public reconstruction pre-consultation applications was completed on September 30, with a total of 15 complexes applying, including those in the Gangnam area."

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