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New Apartment Lottery Rules Announced

Posted June. 27, 2006 03:17,   


A new private apartment subscription plan aimed to raise the ratio of winning for those with more dependents or a longer term of no house ownership when they apply for apartments built by non-governmental constructors in public building land will be introduced in 2008.

When this new plan is enacted, resistance is expected from those with housing subscription accounts who own a home and want to move to a larger apartment.

As the current subscription system will continue to apply to public apartments built by the Korea National Housing Corporation, the reform will not influence 2.29 million subscribers.

On June 26, the Ministry of Construction and Transportation turned in a report for “Suggested Reforms in the Apartment Subscription System” to Jeong Jin-seok, People First Party lawmaker in the Construction & Transportation Committee.

This proposal will be confirmed through public hearings in the middle of next month and enacted from 2008 after the “Rules on Housing Supply” are reformed.

According to the report, the private apartment subscription system will adopt a general point system with weight given to the subscriber’s age, household constitution, the period of no house ownership, and the term of housing subscription account. Income was excluded from the list of factors to receive weight, considering it is not easy to estimate accurately.

Currently, winners are decided by drawing lots among those who gained the first standing two years after opening housing subscription accounts.

With the new system, the probability of winning for those with no house or more dependents will increase.

However, resistance to the new system is expected from those who own smaller apartments but want to move to larger ones or from newly weds with fewer dependents.

The number of subscribers who can apply for private apartments under 25.7 pyeong was about 2.99 million as of the end of last month.

The government is considering a compromise plan in which those who own a house priced under “50 million won+ α” will be included in the category of those with no house.

The general point system will also apply to those who apply for mid- or large-sized private apartments over 25.7 pyeong, and weight will be given to the number of dependents and the period of no-house ownership.

However, most of them are owners of smaller apartments who want to move to larger apartments, so a debate is expected about weight given to the period of no-house ownership.

Jang Seong-su, head of the Policy Research Team in Korea Housing Institute, said, “For mid- and large-sized apartments, the weight system should be used ‘complementarily’ when more than one person receives the same points in the bond bidding system.”

The number of those with housing subscription accounts who can apply for mid- and large-sized apartments was about 1.98 million as of the end of last month.

The government will also change the rules on housing supply to make households with more than three children receive the maximum 3% of apartments from the sale of Seongnam Pangyo apartments in August. Mid- and large-sized apartments are included in the special supply apartment list.

Seung-Heon Lee ddr@donga.com