The Lost Dream of Owning a Home in the Random Number Subscription System

Differences in Mandatory Residency Based on Non-Regulated Areas
Confusing Subscription Points... Absurd Income Criteria Too

The Korea Real Estate Board announced on the 8th that apartment prices in Seoul rose by 0.15% in the first week of July (as of the 5th), increasing the rate of rise compared to the previous week (0.12%). This is the highest rate of increase in about 1 year and 6 months since the third week of December 2019 (0.20%). It is also the eighth consecutive week of a 0.10% increase since the third week of May. The photo shows apartments in the Yongsan-gu and Seocho-gu areas of Seoul, viewed from Namsan in Seoul.

# Mr. and Mrs. A, who have lived without owning a home for 15 years, applied for an apartment in Gwacheon-si, Gyeonggi Province, last July and won the lottery. After overcoming a competition rate exceeding 100 to 1 on average and realizing their dream of owning a home, their joy was short-lived as Mr. A was notified that he was classified as an 'ineligible winner.' The reason was an incorrect input of the subscription points. It was because they included one child studying abroad temporarily as a dependent family member. They were unaware that family members residing overseas are not counted as dependents even if they are registered on the resident registration.

As apartment prices soar and subscription fever intensifies, ineligible winners are emerging every month due to the lottery-like subscription system. This is because the confusing point calculation, the ratio of quotas (points-based and lottery-based) that varies by region, and even different regulations within the same region exist.

◇ Distinction between regulated and non-regulated areas within the same region... Different ratios of points-based and lottery-based systems = In Changwon-si, Gyeongnam Province, most areas such as Uichang-gu are regulated areas, but Masanhappo-gu remains a non-regulated area. In non-regulated areas, one can apply for first-priority subscription after only six months of subscription to the housing subscription savings account. Moreover, there is no restriction on re-winning, and the right to sell the subscription can be transferred immediately after purchase. In contrast, these conditions do not apply in regulated areas.

The ratio of points-based to lottery-based selection also differs significantly. In non-regulated areas, for exclusive use areas of 85㎡ or less, 40% of winners are selected by points and 60% by lottery. However, if the area becomes a regulated area, the points-based quota for 85㎡ or less increases to 75%. Even if one accumulates the same points with difficulty, the chances of winning clearly differ.

◇ Income criteria also controversial... ‘Corporate blue-collar’ excluded = Income criteria are also a subject of controversy. To apply for the Newlywed Hope Town or special supply for newlyweds, applicants must meet income requirements within 130% of the previous year’s average monthly income of urban worker households, or 140% for dual-income couples. The problem is that the difference in income criteria is only 10 percentage points. For dual-income couples working in large corporations, it is practically difficult to qualify for subscription. Recently, a complaint about this was posted on the Blue House’s public petition board. The petitioner pointed out, "The income difference between single-income and dual-income is only 10 percentage points, but in the case of dual-income, if one earns 5 million won, the other must earn 500,000 won, which is unreasonable. Corporate blue-collar workers are the most unfortunate."

◇ ‘Lottery-like subscription system’ shatters dreams of homeownership = Complex subscription regulations are criticized for annually producing innocent victims who have nurtured dreams of owning a home. For example, if one wins the subscription with incorrectly entered points, they are judged as an ineligible winner regardless of intent or negligence. In this case, winning a housing subscription is prohibited for a certain period. In the metropolitan area or speculative overheated zones and subscription overheated areas, one cannot win for one year from the winning date. In non-regulated areas related to subscription, the restriction period is six months.

Experts especially advise caution regarding recently changed laws. From now on, apartments in the metropolitan area that announce resident recruitment and are subject to the price ceiling system will be subject to a residence obligation. If regulations are violated, offenders face imprisonment of up to one year or a fine of up to 10 million won. Apartments must be sold to the Korea Land and Housing Corporation (LH) at the sale price. For houses priced over 900 million won in regulated areas, interim payment loans are not available, and when converting interim payment loans to mortgage loans upon moving in, loans are also unavailable if the market price exceeds 1.5 billion won.

Professor Ko Joon-seok, adjunct professor at Dongguk University Law School, said, "In most cases of ineligible winners, the problem arises from mistakes in point calculation or misunderstanding of complex regulations," adding, "It is necessary to improve and supplement the system to filter out ineligible winners in advance."

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