Despite the Surge in Subscription Demand, Multi-Child Special Supply Faces Frequent Undersubscription... Why?

Prospective Pre-Subscribers in Gyeonggi Area Flock to Seoul with High Price Gains
Most Supply is Small Apartments... Difficult for Families of Five or More to Live

The view of the Gangnam area in Seoul as seen from Lotte World Tower in Jamsil, Songpa-gu, Seoul. (Photo by Yonhap News)

[Asia Economy Reporter Ryu Tae-min] Despite the apartment subscription market overheating due to soaring housing prices, special supply (special quota) subscriptions for multi-child households are repeatedly undersubscribed in the Seoul metropolitan area. In particular, while the competition rate for the first priority general supply subscription exceeds 100 to 1, there are consecutive complexes with no applicants for the multi-child special supply. This has raised the need for institutional improvements to resolve the mismatch between supply and demand.

According to Korea Real Estate Board's Subscription Home on the 12th, the multi-child household special supply subscription for Hwaseong’s “Hillstate Bongdam Pride City,” which was supplied in August, was undersubscribed in 14 housing types except for the 84㎡ (exclusive area) A and B types. In five types, there were no applicants at all. This contrasts with the general supply subscription for 1,288 households, which received 18,564 applications, resulting in an average competition rate of 12.2 to 1 and a highest competition rate of 106.5 to 1 (59㎡ C).

This phenomenon was also observed in complexes supplied in the metropolitan area earlier this year. In March, “Buksuwon Jailex Via” supplied in Suwon City succeeded in popularity with an average competition rate of 20.9 to 1 and a highest competition rate of 148 to 1 for the first priority general supply subscription, but the multi-child household special supply was undersubscribed in 7 out of 12 housing types. In April, “Forena Ansan Gojan” also attracted attention with an average competition rate of 19.3 to 1 and a highest competition rate of 183.5 to 1 for the first priority general supply subscription, but there was not a single application for the 59㎡ B type multi-child household category.

Experts analyze that the repeated undersubscription of the multi-child special supply is due to the subscription system. For multi-child households with three or more children, even residents of Gyeonggi and Incheon can apply for the multi-child household type subscription in Seoul. This is because 50% of the multi-child special supply quota is allocated to Seoul residents who have lived there for more than two years, and the other 50% to residents of Gyeonggi and Incheon (including those who have lived in Seoul for less than two years). As they flock to Seoul, where the price difference is relatively high, the multi-child special supply in Gyeonggi and Incheon is being neglected.

In fact, apartments in Seoul show high competition rates for the multi-child special supply. The “Godeok Gangil Jeil Punggyeongchae” multi-child special supply, supplied in March, attracted 1,122 applicants for 59 households, recording a competition rate of 19 to 1. In particular, for the 84㎡ A type, which recruited 21 households, 317 applicants were from the local area (Seoul) and 319 from other areas (Gyeonggi and Incheon), showing signs of overheating.

Especially, the fact that small-sized housing is not suitable for the multi-child special supply is also cited as a cause of undersubscription. Many multi-child special supply units are small apartments of 59㎡, which is far too small for households with three or more children. In fact, in complexes where the multi-child special supply was undersubscribed, types of 84㎡ or larger tended to have higher competition rates.

Park Ji-min, head of the Monthly Subscription Research Institute, said, “Residents of the metropolitan area can apply for complexes in higher-tier areas such as Seoul or major areas in Gyeonggi, so there is no reason to apply for complexes with relatively low price gains.” He added, “Many units are too small for a family of five to live comfortably, so improvements are needed considering realistic conditions.”

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