“You don’t have to sell the house”… The subscription door widens this year [매부리레터]

“The government has greatly eased subscription regulations. It seems that the number of transfer subscriptions for single-family homeowners will increase. It is good to look at the two-track, such as subscription and quick sale purchases, for end-users who are preparing their own home.” (Park Won-gap, senior real estate expert at KB Kookmin Bank)

The government has announced that it will loosen many subscription regulations this year. In the meantime, the subscription market was only able to subscribe to demand for non-homeowners and actual residents, but with this deregulation, it is expected that single-homeowners, those who lack funds, and those who can afford to rent on a monthly basis will also turn their eyes to the subscription market. As the government quickly relieved subscription regulations to prevent unsold sales, those considering new construction are worth actively targeting the subscription market.

What subscription restrictions will be lifted this year?

Resale restrictions are drastically reduced.

Currently, resale restrictions of up to 10 years in the metropolitan area and up to 4 years in the non-metropolitan area are being applied. Resale restrictions mean that you cannot sell your home. It is applied from the date of winning the offer. For example, if I win an apartment with a 10-year resale limit, I can’t sell that apartment for 10 years from the date of winning. This was a very big ‘barrier’ for those considering subscription. If you can’t sell your home for 10 years, your ‘opportunity cost’ will increase as well. However, from this year, this regulation will be drastically reduced.

In the metropolitan area, the resale restriction period is shortened to 3 years for public housing sites (applying the upper limit on the pre-sale price) and regulated areas, 1 year for overpopulation control areas, and 6 months for other areas. In non-metropolitan areas, public housing sites (applying the upper limit on the sale price) and regulated areas are eased to 1 year, metropolitan areas to 6 months, and resale restrictions are abolished in other areas.

This deregulation is retroactive. For example, if an apartment sold 3 years ago has a 10-year restriction on resale and 3 years have passed since the announcement of the winner as of this year, if the new regulation on resale restriction is mitigated, it means that the 3-year restriction on resale has been met, so it can be sold. loses Dunchon Jugong has a sale announcement with an 8-year resale limit, but a 1-year resale limit will be applied retroactively.

The obligation to live in a house subject to the upper limit on the sale price in the metropolitan area will be abolished.

From February 2021, if you win a house with a maximum sale price in the metropolitan area, you will be obligated to live in it. Depending on the sale price, you must live in the house for 2 to 5 years from the date you can move in. However, from now on, the obligation to live in the house that is subject to the upper limit on the sale price in the metropolitan area and general sale for public redevelopment will be removed.

The abolition of the actual residence requirement is an amendment to the ‘Housing Act’. It will be implemented after the amendment of the Housing Act this year.

An important point is that this is also retroactive. Even if the residency obligation was imposed prior to the amendment of the law, the amended law will be applied retroactively. For example, Dunchon Jugong received a subscription for two years of actual residence, but after the law was revised, it is retroactively applied, so there is no need to actually reside.

Intermediate payment loan guarantee pre-sale price standard will be abolished. The interim payment loan was applied only up to the sale price of 1.2 billion won and was limited to 500 million won per person, but this will disappear. Originally, the upper limit of the pre-sale price of houses that could be guaranteed by the HUG interim payment loan was 900 million won, but it was raised to 1.2 billion won in November of last year. However, this time the government has also solved this 1.2 billion standard.

In addition, the HUG interim payment loan guarantee was only available up to KRW 500 million per person. If the interim payment exceeds KRW 500 million, there were difficulties in financing, and the guarantee limit per person will also be abolished.

Due to this, interim payment loans are available for all apartments in the future, and multiple intermediate payment loans can be obtained per person.

This deregulation will be implemented within the first quarter after the preparation of the banking system after the revision of the ‘HUG Bylaws’.

This is also retroactive. For example, Dunchon Jugong 34 pyeong was 1.3 billion won, so there was no intermediate payment loan, but those who won can apply retroactively for intermediate payment loans.

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The special supply price standard will be abolished. Housing in overheated speculation districts with sale prices exceeding 900 million won is restricted from allocating special supply. As a result, it was a special supply for multiple children, but small acreage used to come out. However, this criterion disappears. The sale price standard that restricts the allocation of special supply will be abolished to enable special supply in all houses regardless of the sale price.

As for the revision of the ‘Housing Supply Regulations’, the government plans to complete the revision by February. It will be applied from the case where the business owner applies for approval for the recruitment of tenants after the implementation. Starting this year, subscriptions are scheduled in Bangbae, Cheongdam, and Banpo. There will be special supplies coming out of these places.

1 The obligation to dispose of the existing house for the winner of the housing subscription is abolished. In the case of a single homeowner winning the subscription (lottery system) in the metropolitan area or metropolitan city, the existing house must be disposed of within two years from the date on which it is possible to move in. There are cases in which the winner was awarded as a condition for disposing of a single homeowner, but the existing house was not sold, so he could not move in.

Therefore, the government abolishes the obligation to dispose of the existing house of the one-homeowner who won the subscription. As a revision of the ‘Housing Supply Rules’, the revision will be completed in February and implemented in the first half of the year after the subscription system is overhauled. This is also retroactive. In other words, those who won the disposition condition can now move in even if they do not dispose of it.

Qualifications for unranked subscriptions are relaxed.

It’s called ‘pick up’. Now even homeowners can pick them up. Among the qualification requirements for non-ranked subscription, the ‘requirement for non-homeownership’ has been abolished, so in the future, even homeowners can challenge non-ranked subscription regardless of their place of residence.

As an amendment to the ‘Housing Supply Rules’, it is scheduled to be revised and implemented in February. Due to this, even homeowners can receive non-priority subscriptions.

Should I move to a new apartment in Banpo or Cheongdam?

In the meantime, the homeowners did not have the opportunity to apply. Even if you won the subscription, there was a condition of ‘disposal within the period of 1 house’. However, these regulations have disappeared. In addition, restrictions on resale and the obligation to live in the home have been removed, and regulations on intermediate payment loans have been eased, making it worthwhile for those with insufficient funds to challenge the subscription market. It is expected that the special supply will also come out of the real location in Seoul as the price standard has disappeared.

This year, subscriptions for large-scale apartments are scheduled in good locations such as Banpo, Cheongdam, and Bangbae in Seoul. According to the sales industry, 27,781 households are sold in Seoul, including Raemian One Perla in Bangbae-dong, Seoul (1097 households), Cheongdam Leel in Cheongdam-dong (1261 households), and Maple Xi in Jamwon-dong (3307 households).

The complex expected in the first half is ‘Cheongdam Leel’ supplied through the reconstruction of Cheongdam Samick. This apartment is a complex with a view of the Han River in Cheongdam-dong, a representative wealthy village in Gangnam. In Banpo-dong and Jamwon-dong, Shinbanpo 15th (Raemian One Pentas) and Sinbanpo District 4 (Maple Xi) are about to be sold, respectively. In Bangbae District 6, it is expected that ‘Raemian One Perla’ will be sold in the first half of next year.

In the Gangbuk area, the remaining Imun and Hwigyeong New Town projects, such as Imun 3 (complex name undecided) and Hwigyeong 3 District (Hwigyeong Xidisentia), are on sale. Eunpyeong-gu Daejo 1 District (Hillstate Mediale), Seodaemun-gu Hongeun 13 District (Seodaemun Central I-Park), etc.

From this year, the lottery system will be available even for flats of 84㎡ or less. Accordingly, even a single homeowner can challenge the pre-sale market.

For this year’s subscription market prospects, check out the real estate newsletter Maeburiletter. You can subscribe to it by searching for Maeburi Letter on Naver.

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