[Taemin Ryu's Real Estate A to Z] Risk of Becoming a '10-Year Subscription Refugee'... The Dilemma of Pre-Subscription in New Towns

Preliminary Subscription Scheduled to Proceed as Planned from July
Possibility of Disruptions Due to Landowners and Residents' Opposition Amid LH Scandal
Concerns Over Massive 'Subscription Refugees' if Housing Supply Delays
Previously Took 10 Years for Move-in Since 2009

[Asia Economy Reporter Ryu Tae-min] The third phase of pre-subscription for new towns, scheduled to begin on the 16th, is fast approaching, but doubts about potential plan setbacks persist in the market. If the land compensation process does not proceed smoothly, the overall project plan could be disrupted. In such a case, concerns are even emerging that a repeat of the "10-year subscription refugee" situation, similar to the Hanam Gam-il district’s "Bogeumjari Housing," might occur.

Pre-subscription takes place 1 to 2 years before the main subscription, which is conducted prior to construction. After the pre-subscription, the main subscription proceeds, followed by the start of occupancy. However, with inevitable delays in the new town projects, conducting pre-subscription as planned could lead to significant postponements in both the main subscription and actual occupancy, causing "false hope" for pre-subscription winners.

Earlier this year, the Korea Land and Housing Corporation (LH) speculation scandal intensified opposition from landowners and original residents in the planned 3rd phase new town areas, increasing the likelihood of project delays. In fact, in Hanam Gyosan, resident opposition has prevented even the start of the investigation into obstructing objects. In Incheon Gyeyang, residents are demanding a re-evaluation of land appraisals, and in Namyangju Wangsuk, conflicts between LH and residents over appraisal values have deepened, suggesting that land compensation will be delayed beyond the original schedule. Shin Tae-su, CEO of Jijon, stated, "In Hanam Gyosan, the investigation of obstructing objects has not even begun, so appraisal cannot proceed, making forced acquisition difficult," adding, "In other areas, residents have been opposing since the LH scandal, so delays in land compensation procedures are highly likely."

Accordingly, there are concerns that a large number of "subscription refugees" who win pre-subscription but face prolonged delays in the main subscription schedule may become stranded. Pre-subscription winners must maintain their non-homeowner status until the main subscription. If the main subscription occurs within 1 to 2 years after pre-subscription as planned, there is no problem, but if it is postponed indefinitely, they may have to live in rental housing.

In fact, during the 2009-2010 Bogeumjari Housing promotion, in areas such as Guri Galmae, Bucheon Ok-gil, Siheung Eun-gye, and Hanam Gam-il, land compensation delays caused by resident opposition led to main subscriptions being conducted 5 to 8 years later than initially planned at the time of pre-subscription. Especially in Hanam Gam-il district, occupancy occurred 10 years after the pre-subscription winners were announced. As occupancy was postponed indefinitely, more than half of the pre-subscription winners gave up their chance to own a home. According to LH and the office of Yoon Kwan-seok of the Democratic Party, out of 13,398 pre-subscription winners at that time, only 5,512 (41.1%) actually received supply.

For this reason, voices in the market are calling for careful determination of the pre-subscription timing. Song Seung-hyun, CEO of City and Economy, said, "Since the LH scandal, procedures such as land compensation and project progress are likely to be delayed beyond the original plan," adding, "To minimize damage to subscribers, it is necessary to reduce the gap between pre-subscription and main subscription as much as possible."

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