[Practical Finance] Changes in the Cheongyak System for Next Year Revealed

Increasing 'Lottery System' for Small and Medium-Sized Housing Sales Attracting Youth
Raising Point System Ratio for Large Housing
Abolishing Residency Requirements for Non-Qualified Subscription

[Asia Economy Reporter Kim Hyemin] Contrary to the chilly atmosphere in the subscription market, significant changes in the subscription system are expected next year. As regulations that were tightly bound by residential area or housing size are lifted, the chances of winning a subscription for young adults and middle-aged groups without housing are expected to increase.

First, from January next year, the residential area requirement for non-priority subscriptions will be abolished. The so-called 'Jupjup quantity' non-priority subscription refers to the process of accepting subscription applications again when the main subscription is undersubscribed or contracts are not completed. The government had restricted the application criteria to non-homeowners residing in the relevant city or county when non-priority subscriptions overheated. However, from next year, the residential area requirement will be removed, allowing any non-homeowner to apply for non-priority subscriptions regardless of their location.

Additionally, the number of preliminary winners has been expanded from over 40% of the household count to over 500%. The timing for discarding the preliminary winner list has also been extended from '60 days after' the initial contract date to '180 days after.' This is to prevent the inconvenience on the ground caused by repeated non-priority subscriptions due to contract failures after the list is discarded.

The special supply scoring criteria will also be adjusted from January next year to favor 'long-term employees of small and medium enterprises' with long periods of non-homeownership. Originally, a maximum of 5 points was awarded for being non-homeowners for over 5 years, but this period will be expanded to a maximum of 15 points (3 points per 3 years). The categories for technical/functional personnel and certificate holders have been merged into one. Considering difficulty and status, the scoring is differentiated: only awards received after the initial SME employment date are recognized, and duplicate awards are not acknowledged.

The most noticeable change is the adjustment of the ratio between the point-based system and the lottery system according to housing size. The government will reform the subscription system from April by increasing the lottery ratio for small and medium-sized housing, which has high demand from young households, and increasing the point-based ratio for large housing, which has high demand from middle-aged groups.

In speculative overheated districts, small and medium-sized areas have so far selected winners solely by points, resulting in fewer chances for young people with fewer dependents and shorter non-homeownership periods. Accordingly, when selling private apartments in speculative overheated districts such as Seoul, the government adjusted the ratio so that up to 60% of small and medium-sized areas (exclusive area of 85㎡ or less) are supplied through lottery. For exclusive areas of 60㎡ or less, the lottery ratio is 60%, and for 60~85㎡, the lottery ratio is 30%, increasing the lottery system ratio.

Conversely, for large areas (exclusive area over 85㎡), the point-based ratio has been increased for middle-aged groups who benefit from accumulating points. The point-based supply ratio is adjusted from 50% to 80%, and the lottery ratio from 50% to 20%. In adjusted target areas, the winning ratio for exclusive areas over 85㎡ is equalized at 50% points and 50% lottery. In non-regulated areas, the current regulations remain: for exclusive areas 85㎡ or less, '40% points, 60% lottery,' and for over 85㎡, 100% lottery.

A special supply for unmarried youth will be newly established in public housing sales. This expands special supply opportunities, previously focused on married couples such as newlyweds or first-time homebuyers, to unmarried youth. This will be introduced in two of the three public housing sale models announced by the government: the Sharing Type and the Selective Type. The Sharing Type allows purchase at 70% or less of market price, with a mandatory residence period of 5 years, after which the buyer is guaranteed 70% of the disposal profit or loss if reselling. The Selective Type allows residents to live in rental form for 6 years and then choose whether to purchase.

Unmarried individuals aged 19 to 39 who have never owned a home, with a single-person household monthly average income of 140% or less and net assets of 260 million KRW or less, can apply. However, if the parents' net assets are in the top 10% (approximately 970 million KRW), subscription eligibility may be restricted.

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