The Ministry of Land, Infrastructure and Transport has put the non-ranking subscription system, known as 'lotto subscription,' on the operating table. Moving forward, it plans to improve the system so that only those without homes can apply for non-ranking subscriptions. While there are discussions about imposing residence restrictions as a condition for application, this measure has not yet been finalized. There are concerns that implementing residence restrictions could accelerate the downturn in local real estate markets.
According to the Ministry of Land, Infrastructure and Transport on the 15th, the government plans to unveil a revised non-ranking subscription system next month. A ministry official noted, "There are plans to announce the reform of the non-ranking subscription system in early February."
The non-ranking subscription system that the ministry intends to improve is one where the occupants of remaining units are re-selected after the original winners either abandon their contracts or are found to be ineligible. This system, commonly referred to as 'pick-up,' currently allows applications regardless of homeownership status or residence area.
Re-supply resulting from initially unsold units or illegal activities such as false reporting that cause the cancellation of application wins is not subject to this system improvement.
The ministry plans to implement measures that limit dwelling ownership requirements so that non-ranking subscriptions can be utilized as an opportunity for those without homes to secure their own. Currently, homeowners can also apply for non-ranking subscriptions.
A ministry official stated, "Even outside the capital region, there are often competition rates of dozens to hundreds to one in the case of non-ranking subscriptions," adding that, "Limiting the application conditions to those without homes will not hinder the resolution of non-ranking subscription volumes in regional areas at all."
There are also discussions about restricting the residence area for non-ranking subscriptions. Within the ministry, there seems to be a consensus that, even in non-capital regions, competition rates are relatively high, and thus restricting residence areas is necessary.
However, there are concerns that uniformly restricting residence areas could accelerate the downturn in local real estate markets, so the ministry has yet to finalize detailed plans for regional restrictions. If limitations are set on residence in more economically depressed non-capital regions compared to metropolitan areas like Seoul, the enthusiasm in the subscription market could rapidly cool down.
A ministry official remarked, "While restricting subscriptions can stabilize the real estate market, it can also make it difficult for the public housing market to attract buyers. Based on these considerations, we are thinking about how to implement residence area restrictions flexibly."
The ministry is reforming the non-ranking subscription system because demand seeking price gains has surged, leading to overheating in the subscription market. In 2023, the ministry allowed anyone to apply for a non-ranking subscription for privately held dwellings regardless of home ownership or residence requirements to address unsold units in local areas. However, this has resulted in an overheated subscription market, making it more difficult for those without homes to secure housing through non-ranking subscriptions.
Last year, the non-ranking subscription for the Lotte Castle near Dongtan Station in Hwaseong City saw a price difference of 1 billion won between the sale price and the market price, with nearly 3 million applications for one household.