Lowered Threshold for Newlywed Special Housing Allocation... What Are the Dual-Income Eligibility Criteria?

From January Next Year, Newlywed Special Supply Will Be Available to Those Earning Up to 106.68 Million KRW Annually
Income Criteria for First-Time Homebuyer Special Supply Also Relaxed by 30%P

(Photo)

[Sejong=Asia Economy Reporter Joo Sang-don] Starting January next year, the special supply targets for newlyweds and first-time homebuyers will be expanded. This is intended to provide more genuine demand groups with opportunities to own a home.

Recently, the government discussed and finalized the "Special Supply System Improvement Plan to Expand Housing Supply Opportunities for Genuine Demanders" at the 8th Real Estate Market Inspection Meeting of Related Ministers, 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 quota (priority supply) is for households with urban worker average monthly income at 100% (120% for dual-income), and the remaining 25% (general supply) is for those earning up to 120% (130% for dual-income).

Going forward, the priority supply ratio will be lowered from 75% to 70%, maintaining the current income criteria, while the general supply quota will increase to 30% with relaxed income criteria up to 140% (160% for dual-income). Under this change, households of three or fewer with a pre-tax monthly income of up to 7.78 million KRW (8.89 million KRW for dual-income) will qualify for the newlywed special supply. Converting 8.89 million KRW monthly income to annual salary equals 106.68 million KRW. The income requirements for 30% of the first-time homebuyer special supply quota will also be raised from public 100% and private 130% to 130% and 160%, respectively.

The government also plans to relax the income criteria for first-time homebuyer special supply. While 70% of the special supply quota will maintain the current standards (public 100%, private 130%), the remaining 30% will have income criteria relaxed by 30 percentage points.

Concerns have been raised regarding the relaxation of criteria for newlywed and first-time homebuyer special supply. There is a high possibility that the already intense competition for newlywed special supply applications will 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, saw 5,536 applicants for 47 units, resulting in a competition ratio of 117.78 to 1. Similarly, Heukseok River Park Xi in Heukseok-dong, Dongjak-gu, recorded a competition ratio of 462.2 to 1 with 6,933 applicants for 15 units. The average competition ratio for general sales in 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 state to line people up and select them like a lottery."

There are also concerns that this could exacerbate instability in the jeonse (long-term lease) market. Lee Eun-hyung, senior researcher at the Korea Construction Policy Research Institute, said, "People with a certain level of subscription score and jeonse deposit may flock even more to 'lottery apartments' where they can expect several hundred million won in unearned income after winning."

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