Eased Standards for Under 85㎡ and 500 Million Won or Less in the Metropolitan Area
Part of the Measures to Revitalize Villa Demand… Will Subscription Competition for Popular Apartment Areas Increase?
Starting from the 18th, individuals owning a single villa in the metropolitan area with an exclusive area of less than 85㎡ and an official price of less than 500 million won (real market price of about 700 million to 800 million won) will also be recognized as non-homeowners during apartment applications.
The revision to the ‘Housing Supply Regulations’ will be announced and enforced on the 18th, according to the Ministry of Land, Infrastructure and Transport. This change expands the range of non-apartment types that are considered non-homeownership during applications. This move was announced as part of the government’s 8-8 measures to activate the sluggish non-apartment market.
Previously, individuals owning apartments or non-apartments with an exclusive area of less than 60㎡ and an official price of less than 160 million won in the metropolitan area (60㎡ and 100 million won for regional standards) were considered non-homeowners during applications. The government is leaving the standards for apartments as is but significantly easing those for non-apartments.
This means that in the metropolitan area, properties with an area of up to 85㎡ and an official price of up to 500 million won, and in regions, up to 85㎡ and 300 million won, will be recognized as non-homeownership.
Non-apartments include multi-family villas, townhouses, row houses, single-family homes, and urban living housing.
The changed regulations will apply to apartment complexes with resident recruitment notices from the 18th onward, and even if a villa was purchased before the implementation date, as long as it meets the non-homeownership criteria, it will qualify.
The official price at the time of the recruitment notice will determine non-homeownership status, so even if the official price rises by the move-in date, it will not affect the application outcome. Consequently, the competition rate for subscriptions in popular areas may increase.
A representative from the Ministry of Land, Infrastructure and Transport stated, “Those who meet the criteria for subscription eligibility, income, and assets will only apply if they have the means to pay the subscription deposit for preferred complexes, so the competition rate will not increase significantly.”
The easing of non-homeownership conditions was part of the measures announced in the “8-8 Measures” this year for normalizing the non-apartment market. This is intended to activate villa demand by removing disadvantages for villa owners during apartment applications.
Due to rental fraud and reverse rent impacts, the overall demand and supply for non-apartments are on a declining trend. By October this year, the total cumulative sales transactions for non-apartments were 126,000, a 33% decrease from last year’s 188,000, equating to about half of the 10-year average (249,000). The number of non-apartment housing starts this year until October was merely 29,000 units, significantly falling short of last year’s 73,000 units and the 10-year average of 115,000 units.