Surge in Subscription Fever Produces Many Ineligible Applicants... Warning Against 'Blind Subscription'

Surge in Subscription Fever Leads to Massive Ineligible Applications
Random-Like Subscription System and Loan Regulations to Blame
Risk of Losing Subscription Opportunities and Facing Eligibility Restrictions

The Citizens' Coalition for Economic Justice claimed on the 23rd that "during the four years of the Moon Jae-in administration, apartment prices nearly doubled, and it would take 25 years to buy a house by saving money without spending." The photo shows apartment complexes in the Songpa and Gangnam areas of Seoul, viewed from Namhansanseong on the same day.

As apartment prices soar, the enthusiasm for subscription is getting hotter, leading to an increase in 'blind subscription' where people apply without having the necessary funds or meeting the conditions, just thinking "let's apply first and see."

On the 26th, Daewoo E&C announced that it will conduct a post non-priority subscription for the 'Sewoon Prugio Hericity' apartments supplied in the area of 151-1, Inhyeon-dong 2-ga, Jung-gu, Seoul. This supply consists of 68 remaining units out of 281 apartments from the 4th to 15th floors. In the first-priority subscription for the relevant area conducted in May, the competition rate recorded an average of 29 to 1, but due to winners giving up and disqualifications, a large number of so-called 'jumb-jumb' cases emerged.

In the case of 'Ssangmun Station City Pradium,' which was sold in April, the first-priority subscription recorded a high competition rate of 51 to 1 on average, but about a quarter of the total supply (112 units) was also released as non-priority subscriptions.

With house prices rising too much and no other way to secure a home except through subscription, crowds are gathering even more. The 'lottery subscription' environment, where a premium worth hundreds of millions of won is formed just by winning the subscription, is cited as a cause of blind subscriptions. Additionally, the real estate subscription system and loan regulations, which are like a lottery ticket, are pointed out as factors producing disqualified applicants.

The problem is that if winners fail to secure funds after winning or become disqualified, they can be significantly distanced from the opportunity to own a home. Experts advise that 'blind subscription' wastes valuable subscription opportunities and can lead to subscription restrictions for a while, so subscriptions should be conducted carefully.

Particularly, attention should be paid to recently changed laws. From now on, apartments in the metropolitan area that have announced resident recruitment and are subject to the price ceiling system will be required to have a residence obligation. It will no longer be possible to plan funds by renting out the apartment at the time of move-in to cover the balance payment.

If the residence obligation is not followed, offenders may face imprisonment of up to one year or a fine of up to 10 million won upon detection. Apartments must be sold to LH (Korea Land & Housing Corporation) at the sale price.

It should also be considered that houses priced over 900 million won in regulated areas are not eligible for interim payment loans. When converting interim payment loans to mortgage loans at the time of move-in, loans are also not available if the market price of the subscribed apartment exceeds 1.5 billion won.

Minor mistakes such as errors in entering subscription information should also be avoided. Due to the complexity of subscription qualifications, misunderstandings of resident qualification systems, and input errors in the online subscription system (such as household member names, duplicate subscriptions among household members, home ownership status, period of non-homeownership, disqualification reasons, etc.), 'disqualification cancellations' after winning subscriptions occur steadily every year.

According to the 'Cancellation Status Due to Disqualification in the Last 5 Years' submitted by the Korea Real Estate Agency to Yang Kyung-sook, a member of the Democratic Party, the proportion of cancellations due to disqualification reached 10.2% of all winners, totaling 112,553 cases. By year, there were ▲29,034 cases in 2016 ▲21,807 cases in 2017 ▲19,884 cases in 2019 ▲19,101 cases in 2020, and 3,758 cases occurred up to April this year.

The most important point to be careful about when entering subscription information is the score calculation. Looking at the types of disqualified winners over the past five years, 71.3% of disqualified winners, totaling 80,264 people, lost their opportunity to acquire housing due to errors in subscription score calculation. Violations of re-subscription restrictions, supply standards for non-homeowning households, and limits on special supply frequency are also major cases.

Meanwhile, the post non-priority subscription for 'Sewoon Prugio Hericity' will be conducted from the 30th to the 1st of next month through the Korea Real Estate Agency's Subscription Home. By exclusive area, there are 24 units of 24㎡ Type A, 3 units of 24㎡ Type C, 25 units of 28㎡ Type A, 15 units of 29㎡ Type A, and 1 unit of 29㎡ Type C. This complex is subject to the price ceiling system, with an average sale price of 29.06 million won per 3.3㎡.

This non-priority subscription is subject to the housing supply rules revised last month. Applicants must be residents of Seoul as of the announcement date, all household members must be non-homeowners, and there must be no disqualifications such as re-subscription restrictions.

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