As the Korea Land & Housing Corporation (LH) halted private sales of public housing sites, concerns are growing that relief for those whose private advance subscriptions were canceled will be delayed. Early this year, the government said it would recognize the winning status of those whose advance subscriptions were canceled due to private builders abandoning projects, granting them relief in follow-up projects. But with LH recently deciding to directly handle development of public housing sites, all procedures to sell public sites to the private sector have been suspended, making it impossible to find follow-up private developers for canceled project sites.
The government is expected to push ahead with follow-up projects through LH's direct implementation and provide relief to those whose advance subscriptions were canceled. However, in this case, it is likely that the specific project method will be decided only after the end of the year, when LH's reform plan is finalized, so it is expected to take considerable time before those whose advance subscriptions were canceled can secure homes.
According to the Ministry of Land, Infrastructure and Transport and LH on the 24th, LH tried to sell housing sites to secure follow-up private developers for the Hwaseong Dongtan 2 (C28BL) and Yeongjong Sky City (A41BL) sites, where private advance subscriptions were canceled, but all attempts failed.
The private housing advance subscription system moves up the timing for recruiting occupants for privately sold dwellings within LH's public housing sites by about two to three years, from "at groundbreaking" to "at the time of the land supply contract." It was introduced to accelerate housing supply through early sales.
Private builders, following the system's introduction, purchased public housing sites and conducted advance subscriptions, but abandoned projects as the real estate market slumped. With apartment construction itself scrapped, those waiting to move in after winning advance subscriptions lost their chance to buy homes and suffered the loss of their subscription eligibility.
In January this year, the ministry decided to grant relief to all those whose private advance subscriptions were canceled. It required follow-up developers that acquire the canceled project sites to give priority occupancy rights to those whose wins were canceled.
However, efforts to find follow-up private developers for canceled project sites are currently on hold. This is because, under the Sept. 7 real estate measures, the government decided to supply dwellings by having LH directly develop public housing sites instead of selling them to the private sector, suspending all private sales of public sites.
Amid this, cases continue to emerge of private builders canceling projects for which they conducted advance subscriptions. According to materials LH submitted to the National Assembly Budget Office, among the project sites subject to private advance subscription in the first half of this year, contracts were terminated for seven multifamily housing sites: Wonju Taejang 2, Gyeongsan Daeim B3, Gyeongsan Daeim M1, and Paju Unjeong 3 blocks 1, 2, 5, and 6. The total number of advance subscription households on the seven public housing sites is 2,397.
Instead of reselecting follow-up private developers for canceled public housing sites, the ministry is likely to give priority supply of apartments built through LH's direct implementation to those whose private advance subscriptions were canceled.
However, if the government gives priority supply of dwellings directly developed by LH to those whose private advance subscriptions were canceled, additional move-in delays for winners appear unavoidable. This is because the government is preparing LH's reform plan through the LH Reform Committee, and specific reform measures are expected to take shape around the end of this year. As the business method using public housing sites will be fleshed out after LH's reform proceeds, the method for follow-up projects is expected to be decided no earlier than next year.
Uncertainty is expected to rise in various aspects, including higher sale prices due to follow-up project delays, changes in apartment brands, and changes in dwelling types. In addition, if housing supply on canceled sites proceeds in the form of public sales, resistance from those who had won private apartment advance subscriptions cannot be ruled out.
An official at the ministry said, "We will review specific relief measures for those whose advance subscriptions were canceled (after the suspension of private sales of public housing sites)."