[Q&A] Special Housing Allocation for Single-Person Households Possible from November... "No Reduction in Opportunities for Ages 40-50"

Applied to complexes recruiting residents from November
No reduction in opportunities for long-term homeless aged 40-50
Asset criteria must be met if income exceeds 160%

The site of redevelopment for Miseong Apartment and Jinju Apartment in Songpa-gu, Seoul [Image source=Yonhap News]

The chances of winning special apartment supply for single-person households and newlywed couples without children will be expanded.

On the 7th, the Ministry of Land, Infrastructure and Transport announced a reform plan for the subscription system that converts 30% of the lifetime first-time and newlywed special supply, which mainly goes to newlywed couples with children, into a lottery system. This measure was introduced by the government in response to growing dissatisfaction that the youth are being excluded from the special supply blind spots.

This system is expected to be applied to apartment complexes recruiting residents from November onwards. However, even though some of the supply will be converted to a lottery system, the number of eligible applicants is expected to increase significantly, leading to high competition rates, and concerns remain that "lottery subscriptions" will continue.

A Ministry of Land, Infrastructure and Transport official said, "Currently, it is impossible for high-income individuals such as single-person households or couples working at large corporations to win special supply, but this system allows them to have a chance to win subscriptions, which is meaningful," adding, "It is expected that their opportunities to own a home will expand."

Below is a Q&A with a Ministry of Land, Infrastructure and Transport official regarding the recent reform of the lifetime first-time and newlywed special supply system.

(Data provided by the Ministry of Land, Infrastructure and Transport)

- When will the lottery system for 30% of the newlywed and lifetime first-time special supply be introduced?

▲ It is planned to be announced for legislation in September, undergo regulatory review in October, and be implemented in November. It is expected to apply to apartment complexes recruiting residents from November onwards.

- How was the 30% ratio of the lottery supply for lifetime first-time and newlywed special supply determined?

▲ The 30% lottery conversion was set to increase subscription opportunities for high-income individuals and to maintain preferential treatment for socially vulnerable groups. Since this system originated from the ruling party-government council, opinions were also provided by the ruling party. It was appropriately coordinated and decided. Thirty percent accounts for 9% of the total supply, so it is not considered a small amount.

- Even if 30% of the existing special supply is selected by lottery, competition may be fierce, reducing its effectiveness.

▲ It is meaningful in that currently, high-income individuals such as single-person households or couples working at large corporations cannot win special supply, but this system allows them to have a chance to win subscriptions. Currently, it also increases subscription opportunities for the 2030 generation who purchase homes by leveraging all their resources ("Yeongkkeul"). Of course, this policy is meaningful on the premise that the overall supply (the pie) increases.

- Won't the introduction of lottery supply in lifetime first-time and newlywed special supply reduce subscription opportunities for existing special supply waiting applicants?

▲ The subscription opportunities for existing lifetime first-time and newlywed special supply waiting applicants will inevitably be somewhat reduced. However, the introduction of the lottery system is implemented at the minimum necessary scale to improve the current subscription blind spots. We will strive to provide sufficient subscription opportunities for genuine homebuyers without homes.

- Is there any concern that the reform will reduce subscription opportunities for the 4050 generation?

▲ The proportion of general supply for private housing operated by the point system will remain unchanged. It is expected that there will be no reduction in subscription opportunities for households that have maintained no home ownership for a long time.

- What is the exact asset standard applied to households exceeding 160% of the income standard?

▲ Households exceeding 160% of the average monthly income of urban workers (9.65 million KRW per month for a 3-person household) must have real estate assets of 330 million KRW or less to apply for special supply subscription. 330 million KRW corresponds to about 500 million KRW in market value, which is approximately the top 20% in real estate asset ownership. This is about 1.5 times the current real estate asset standard of 215.5 million KRW (top 30%) applied to public sale special supply.

- Why is only real estate assets considered?

▲ Originally, not only real estate assets but also automobiles, financial assets, and parents' assets should be considered, but including these would strengthen regulations more than public sales, so they were excluded. Considering financial assets also presents technical challenges.

- Does this system apply to Newlywed Hope Town?

▲ This reform plan does not apply to national housing (public sales). Since Newlywed Hope Town is public sales, it is unrelated to this reform plan.

- The existing private housing lifetime first-time special supply prioritizes 70% of the supply to those with income below 130%, and 30% general supply to those with income below 160%, including failed households. How will this supply ratio change with the system improvement?

▲ With the introduction of the 30% lottery supply, the existing priority supply (lifetime first-time below 130%) will be adjusted to 50%, and general supply (lifetime first-time below 160%) to 20%. The same applies to newlywed special supply.

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