There is way to win contract even if winning point for apartment applications is too high

2024.04.11 17:30
Shim Yoon-ji

A view of an apartment complex in central Seoul from Namsan, Jung-gu, Seoul. By Donghoon Sung

A view of an apartment complex in central Seoul from Namsan, Jung-gu, Seoul. By Donghoon Sung

In the first quarter of this year, the passing mark for apartment application in Seoul was higher than the perfect score for a three-person household. This is because the supply of new apartments was significantly reduced compared to the previous quarter and applicants with high scores were gathered as apartment applications were conducted mainly for popular apartment complexes in Gangnam.

However, it is not impossible for two or three-person households to win new apartment contracts in Seoul through the process of general supply. Since April last year, the number of apartment contracts by a lottery system for applicants with lower scores has increased significantly. Last year, there were a number of new apartment complexes where two or three-person households were able to win through a merit system.

According to RealToday, a real estate research firm that analyzed data from the Korea Real Estate Agency on April 10, the average of the lowest winning points for apartment applications in Seoul in the first quarter of this year was 65.78 points. This is up 13.56 points compared to the fourth quarter of last year (52.22 points).

The fact that the average of the lowest winning points is about 65 points means that an applicant needs to live with at least three family members to win a contract. An applicant with two or three family dependents would get a perfect score of 64 points when he or she has not purchased a house for 15 years and has deposited a certain amount of money into an apartment subscription account every month for 15 years. The perfect score for new apartment applications is 84 points, which is scored according to the period of being homeless (up to 32 points), the period of depositing into an apartment application account (up to 17 points), and the number of family dependents (up to 35 points).

However, it is hard to see the short-term spike in application scores as a trend. This is because the number of new apartments was too small. In the first quarter, the general supply of apartments in Seoul amounted to 328 units, only one-sixth of the total in the fourth quarter of last year (1,918 units). In addition, most of them were high-end apartment complexes, such as Pozes Hangang in Gwangjin-gu and Maple Xi in Seocho-gu, where applicants who win contracts can make a huge profit so such situations were bound to attract applicants with high scores.

Experts advised that even two or three-person households can try to win apartment applications through a lottery system for general supply. According to the Ministry of Land, Infrastructure, and Transport's amendment to the “Rules on Housing Supply” in April last year, 40 percent of new houses with the size of 60 square meters or less in overheated speculative zones will be supplied through a merit system and 60 percent through a lottery system. Also, in unregulated areas, as many as 60 percent of new houses with the size of 85 square meters or less will be supplied through a lottery system.

For example, in the case of Maple Xai, which is located in Seocho-gu, a regulated area, the size of all houses provided through the general supply were less than 60 square meters, so the amount of them supplied through the lottery system was higher at 60 percent. In unregulated areas, 60 percent of houses in Gyeonghuigung Ubora and The Sharp Dunchon Fore were sold through the lottery system.

It is not impossible to win a contract through the merit system. The highest winning point for a house with the size of 52 square meters in Raemian La Grande, which was sold in August last year, was 52 points, and 55 points for Cheonggye Riverview Xi, which was sold in December. "It is true that an applicant needs to have four family dependents in Gangnam, where the upper sales price limit is applied, and have at least three family dependents in Gangbuk to win a contract through the merit system.”

a household of five or more people in Gangnam, a household of four or more people in Gangbuk can be in the stable zone of the price point system," said Park Ji-min, head of the Wallyong Apartment Application Research Institute. “However, if the sales price of an apartment is slightly lower than the market price, it will be possible for an applicant with high 50s to win a contract.”

The problem is the price of apartments. As of February this year, the price of an apartment in Seoul was 37.87 million won per 3.3 square meters, which requires at least 1.1 billion won to buy a 30-square-meter apartment. That is a lot of money for young adults and newlyweds. Mr. A, an office worker who is considering closing his apartment application account, said, "As the sale price of apartments in Seoul itself is so high, even if I win a contract by the lottery system, I don't think I'll be able to finance it.”

※This article has undergone review by a professional translator after being translated by an AI translation tool.

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