Young Adults, Buy a New Apartment Worth 500 Million Won with 70 Million Won of Their Own Money

Announcement of Plan to Supply 500,000 Public Housing Units for Youth and Low-Income Groups

Photo by Asia Economy

A total of 500,000 public sale housing units with low prices and ultra-low interest rate support will be supplied in the future. It will also open the way to purchase a house worth 500 million KRW with a down payment of 70 million KRW. In addition, the number of lottery-based units for single and 1-2 person youth households, who were virtually excluded from the subscription market, will increase.

On the 26th, the government held the 7th Youth Policy Coordination Committee chaired by Prime Minister Han Duck-soo and announced the joint plan of related ministries, the "Plan to Supply 500,000 Public Housing Units for Youth and Low-Income Housing Stability." This is a comprehensive measure to expand homeownership opportunities for youth and low-income groups who were driven to "panic buying" due to soaring housing prices in recent years.

First, the supply volume for youth, newlyweds, and low-income households without homes will be increased. Over the next five years, 500,000 public sale housing units such as Youth Cost-Price Housing and First House Near Subway Stations will be supplied at low prices and low interest rates in prime locations near subway stations and excellent areas. This is more than three times the 147,000 units supplied during the previous five years of the last administration. In particular, 340,000 of the 500,000 units will be intensively allocated to the youth.

The methods for securing housing are divided into three types?Sharing Type (250,000 units), Selective Type (100,000 units), and General Type (150,000 units)?so that individuals can choose according to their income, asset conditions, and life cycle. The Sharing Type allows buyers to purchase from the start with the sale price set at 70% or less of the market price. After the mandatory residence period (5 years), when reselling to the public, 70% of the market price gain is guaranteed. Notably, 80% of the discounted sale price can be supported through long-term mortgages.

For example, a house valued at 500 million KRW is sold at 350 million KRW, and 280 million KRW of that can be loaned. In this case, the required down payment is only 70 million KRW. The Selective Type is a model where residents live first at a low rent and choose whether to purchase after six years. The government plans to start pre-subscription for about 11,000 units by the end of this year, selecting locations in downtown Seoul and public housing sites in the metropolitan area.

The chances of winning subscriptions for youth and single households will also be greatly expanded. Special supply for single youth will be newly established in the public sale Selective and Sharing Types. The lottery portion in private subscriptions will also increase, raising the chances of winning. Currently, in speculative overheated districts, all units (100%) under 60㎡ are decided by a point system, but under the improvement plan, the point system units will be reduced to 40%, and 60% will be newly allocated to lottery-based units.

Along with support for youth homeownership, measures for housing-vulnerable youth will also be prepared. Temporary special monthly rent support for low-income youth will begin in November, and the separate payment support for youth housing benefits will expand from 46% this year to 47% next year. Regarding the recent surge in jeonse fraud, measures such as disclosing the list of malicious landlords and increasing the discount on the jeonse deposit return guarantee fee from 50% to 60% will be implemented.

Land, Infrastructure and Transport Minister Won Hee-ryong said, "We will do our utmost to break down the modern housing caste society where where you live becomes your status, and to restore the dreams and hopes that were given up because of worries about housing."

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