How to Buy New Buildings Without a Subscription Savings Account? ... What Is 'Boryuji Bidding'?

[Asia Economy Reporter Ryu Tae-min] Recently, as the entry barriers to the housing subscription market have increased, there is growing interest among consumers in ways to buy new apartments without a subscription savings account. A representative example is the bid for reserved lots, which allows the purchase of newly built apartments without buying pre-sale rights.

Reserved lots are units that the reconstruction or redevelopment association, as the project operator, withholds without selling to prepare for unforeseen circumstances such as omissions, errors, or lawsuits involving subscription applicants. The association can reserve up to 1% of the total number of units as reserved lots, but in practice, only a very small amount less than 1% is usually kept as reserved lots.

Reserved lots are sold to the public through a bidding process at the discretion of the association a few months before completion. The highest bid above the minimum bid price set by the association wins the auction. Since the timing is close to move-in, the price is set based on market value rather than the pre-sale price. Anyone over 19 years old can participate in reserved lot bidding without a subscription savings account.

Interest in reserved lot bidding has increased further with the implementation of the price ceiling system for pre-sale apartments. This is because not only has the supply of new apartments decreased, but also pre-sale price ceiling areas usually have resale restrictions of 8 to 10 years, which further reduces the availability of newly built units ready for immediate move-in.

However, caution is needed as financing can be difficult. Generally, a deposit of 50 million to 100 million KRW must be paid at the time of bidding, and a contract deposit must be paid at the time of signing. Since the move-in date is near, the balance is usually paid within about a month. The problem is that reserved lot bidding does not allow for interim payments or mortgage loans, so those without sufficient funds may face difficulties.

A representative channel to check information on reserved lot sales supplied in Seoul is the redevelopment and reconstruction ‘Cleanup System’ website. Associations are required to post bidding announcements on this site. Additionally, regularly checking the websites of interested complexes or directly contacting the association office are also good methods. Sometimes, checking sale announcements published in newspapers can also be helpful.

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