In-depth analysis of the series real estate marketIf you don’t know, you lose!... Real estate system that will change in 2024
The real estate system changes slightly every year, so you need to be familiar with it and plan a good strategy to get one step closer to your dream of owning a home. The 2024 real estate system includes policies to lower the housing burden on newlyweds, young people, and households with children as high interest rates and high prices continue.
This real estate system will be reformed to be generally advantageous to the 2030 generation. Young people, newlyweds, and families with children will receive this benefit. However, complaints are being raised that middle-aged people are being excluded.
Young people, pay attention! We provide support for ‘buying your own home’ in 3 steps.
In February next year, the government will promote ‘Youth Buying a Home 1, 2, 3’ housing support, which will relax the criteria compared to the existing youth-friendly subscription account and include loans and additional benefits. Young people receive benefits through three stages of their life cycle.
The first stage is the ‘Youth Housing Dream Account (Subscription Account)’, which allows homeless people aged 19 to 34 to sign up. Compared to the existing ‘Youth Preferential Subscription Account’, there are four relaxed subscription requirements: income condition (less than 36 million won per year → less than 50 million won per year), target (non-homeowner → non-homeowner), interest rate (maximum 4.3% → maximum 4.5%), A payment limit (maximum 500,000 won → maximum 1 million won) applies.
In the second stage, if you win the application with the aforementioned bank account, you can receive a loan up to 80% of the sale price at an interest rate of as low as 2.2% through the ‘Youth Housing Dream Loan’. Eligibility requirements include being under the age of 39 and without a home, signing up for the account for at least one year, and paying more than 10 million won. Income requirements are 70 million won or less per year for singles and 100 million won or less for married people. In addition, it targets houses with a sales price of 600 million won or less and an exclusive area of 85㎡ or less.
The third stage is ‘additional support by life cycle’. After winning the application with the relevant bank account and proceeding with the loan, the interest rate is further reduced if you are married, have a child, or have multiple children. The interest rate is reduced by 0.1%p for marriage, 0.5%p for childbirth, and 0.2%p for each additional child. However, the lower limit of the loan interest rate is 1.5%.
From ‘marriage penalty’ to ‘marriage merit’… Subscription system reform
When you register your marriage, you are applied at a disadvantage when applying for a loan/subscription compared to when you are single, and a new term called ‘marriage penalty’ has emerged. Accordingly, in March next year, the government will begin to improve the subscription system that is disadvantageously applied in marriage.
In the special provision of public housing, excluding special services for young people, the dual-income income standard is improved from 140% of average monthly income to 200%.
Also, if two couples win multiple subscriptions on the same day, previously it would have been invalidated, but under the new system, priority will be given to the one submitted first.
The standard for special provision for multiple children is also relaxed from ‘3 or more’ to ‘2 or more.’ Distribution of number of children: existing 3 (30 points), 4 (35 points), 5 or more (40 points) → Improved to 2 (25 points), 3 (35 points), 4 or more (40 points) It fluctuates.
Also, previously, if the spouse owned a house before marriage or had a history of winning a special prize, it was not possible to apply for special supply for first-time or newlyweds. However, the government decided to exclude the spouse's home ownership and subscription winning history before marriage.
Regardless of marital status, a 1% loan is available as long as you give birth.
According to the National Statistical Office, Korea's total fertility rate in the third quarter of this year was 0.7, the lowest ever. As the number of births continues to decrease, the government established a new special loan for newborns to increase the birth rate.
The ‘Newborn Special Purchase/Lease Fund Loan’ is a system that relaxes income requirements and interest rates to ensure residential stability for families with a baby. Since loans are available with interest rates as low as 1%, interest is focused among families who are preparing to buy their own home.
What is unique is that you can receive a loan for purchase or lease funds regardless of whether you have registered your marriage or not. However, only non-homeowner households that gave birth within two years of the loan application date can apply, and it applies to children born after 2023.
First of all, the income requirement for the ‘Newborn Special Purchase Loan’ has been raised by about twice (KRW 130 million or less) compared to existing loans (KRW 60 million for singles and KRW 70 million for newlyweds). In addition, the housing price (KRW 600 million → KRW 900 million), loan limit (KRW 400 million → KRW 500 million), and interest rate level by income (1.85-3.0% for income of KRW 85 million or less, 2.7-3.3% for income of KRW 85 million to KRW 130 million), etc. It is alleviated.
‘Newborn special lease loan’ is also greatly relaxed compared to existing loans. The income requirement will be changed from ‘less than 50 million won for singles and 60 million won for newlyweds’ to ‘130 million won’. The target housing deposit (existing KRW 400 million in the metropolitan area, KRW 300 million in the local area or less → KRW 500 million in the metropolitan area, KRW 400 million in the local area or less) and interest rates will also change favorably.
The subscription system has become more advantageous for households with marriage and childbirth... What will the real estate market look like in the future?
Starting in March next year, the government will establish a new special supply for newborns at the public sale New: Home, supplying approximately 30,000 units annually. If pregnancy and childbirth can be proven within 2 years from the date of the tenant recruitment announcement, special qualifications for public sales are given. In addition, urban workers must meet 150% of the average monthly income and assets of 379 million won or less.
In private sales, when there is a special supply for first-time or newlywed couples, a supply of approximately 10,000 units per year is given priority to households with childbirth. For private sales, like public sales, pregnancy and childbirth must be proven within 2 years from the date of the tenant recruitment announcement. The average monthly income of urban workers must meet 160% or less.