The government decided to maintain the winning status of private pre-application winners who lost their eligibility as a result of the cancellation of private sector housing projects. This means that those whose pre-application wins were canceled can receive priority for housing supply in subsequent housing projects conducted on the canceled project sites.
Although the requests from the cancelled winners to inherit their winning eligibility in subsequent projects were accepted, there are many hurdles to overcome before the cancelled winners can move into the dwellings in the follow-up projects. The uncertainty surrounding the selection of subsequent project operators and when the project will resume, along with the potential rise in sale prices, could be more of a 'psychological torture' for the private pre-application winners whose status was canceled. This is especially true since some project sites are being converted to rental dwellings, which is anticipated to provoke backlash from the cancelled winners.
On the 22nd, the Ministry of Land, Infrastructure and Transport announced plans to recognize the winning status of private pre-application winners whose wins were canceled in subsequent projects. A total of 713 cancelled winners from seven complexes will be affected.
The private housing pre-application system aims to expedite the supply of dwellings through early sales by moving the recruitment timeline for residents of private dwellings in public land from the construction phase to around 2 to 3 years earlier at the land supply contract stage, managed by the Korea Land and Housing Corporation (LH).
By the end of 2022, when the system was abolished, pre-applications were conducted for a total of 45 projects. Among these, 20 projects completed their final applications, while 18 projects are set to conduct final applications. The remaining seven projects saw businesses abandon them after conducting pre-applications due to deteriorating project viability, resulting in cancelled winners. These cancelled winners cannot apply for other applications and have lost special supply eligibility during the waiting period for moving in, resulting in substantial harm to their efforts to secure a home. Consequently, the cancelled winners demanded to retain their application eligibility in subsequent housing supply projects being conducted on the cancelled project sites.
The Ministry of Land is planning to prioritize the selection of cancelled winners for residency by the subsequent project operators, in response to their opinions. Cancelled winners must apply for a dwelling that is the same or similar in size to the area of the cancelled project during the priority supply phase; after winning, they will be managed as winners of the same type as the cancelled category. Obligations regarding maintaining the number of dwellings, fulfilling residency periods, and holding subscription accounts will remain the same as they were for the original pre-applications. However, from the point of notification of cancellation, the obligation to maintain the number of dwellings will be applied flexibly, judging only the number available at the time of the priority supply announcement of the subsequent project.
In the first quarter of this year, the Ministry of Land will re-select private operators for the cancelled project sites. Four complexes, including ▲Hwaseong Dongtan 2 C28BL, ▲Yeongjong Sky City A41BL, and ▲Paju Unjeong 3 Districts 3BL and 4BL, will have land re-sale announcements conducted in the first quarter of this year. The selected subsequent project operators will prioritize the cancelled winners when recruiting residents. The LH will impose conditions to allocate a quantity proportionate to the number of cancelled winners (by area and type) during the land re-sale for the cancelled project sites, planning to establish separate incentive measures for each complex to minimize project delays.
Incheon Gajung 2 District B2BL will supply public housing directly through LH. Plans are in place to give priority to cancelled winners during the resident recruitment announcement early next year. In the case of Yeongjong International City A16BL, the project is being progressed as public support for private rental housing, where some of the overall quantity will be allocated as priority supply for cancelled winners (sale dwellings), with plans to recruit residents by the end of this year. The winners of the dwelling applications for the South Gyeongsang Province Miryang Bubuk District S-1BL have already forfeited all their eligibility, thus are not eligible for the transfer of application rights.
The government has reversed its previous stance that it would be difficult to maintain the winning status of cancelled winners in subsequent projects, but it appears that the path for them to actually move into the dwellings they won is still steep. Finding new private operators for projects canceled due to lack of viability is expected to be challenging. If the brand of the dwellings in subsequent projects is not as good as before, it is another burden that the cancelled winners will have to endure. Recently, sale prices have continued to rise, and as project timelines extend, cancelled winners may have to pay unexpectedly high prices.
In particular, in the case of Yeongjong International City A16BL, the project is being converted to public support for private rental housing, and resistance from the cancelled winners is expected. This is because the project that was originally pursued as private housing was changed in November of last year to a public support private rental housing project, thus putting the cancelled winners in a situation of receiving rental housing occupancy rights.
In response to these concerns, a Ministry official stated that there has already been sufficient communication with the emergency response committee formed by the cancelled winners, so there should be no issues. This policy was formulated based on the understanding that the cancelled winners accepted the multiple uncertainties due to delays in subsequent projects such as rising sale prices, additional moving delays, and changes in dwelling types like branding.
A Ministry official noted, "We are considering various incentives for subsequent operators," and added, "We will take favorable conditions regarding the payment of interim payments to expedite the sale of the cancelled sites." The official further mentioned, "Since land prices were quite high when land was competitively purchased in 2021-2022, we anticipate that land prices will be lower than then when we newly sell the land."
The official also stated, "The changes in sale prices are under the purview of the private sector, and it is beyond our scope to artificially adjust the sale prices," adding that "it is a matter that the successful bidders must negotiate rationally with the business operators." Additionally, the official explained, "This plan grants the choice of maintaining winning eligibility, and it is not mandatory to participate in the subsequent projects, and discussions have progressed based on the understanding that they can withstand the increases in sale prices, changes in brands, and changes in dwelling types."