How Korea's apartment subscription system is structured

Why look at the structure first

When people in Korea start thinking about applying for a new apartment, the first thing that comes to mind is usually the housing subscription savings account. But the account is only one part of eligibility. Whether you win depends on how a complex's units are divided, which share you can apply for, and how applicants are ranked within that share. Deposits and payment records are covered in the separate guide on subscription accounts; this one sketches the system as a whole. It describes new apartments in South Korea, and because ratios and requirements change often, it explains concepts rather than figures.

Public housing and private housing

The first dividing line is who builds the homes and on what terms. National housing supplied by the state, local governments or public bodies follows different eligibility and selection rules from private housing built by construction companies. National housing often comes with income and asset limits, and its general supply ranks applicants mainly by their account payment record. Private housing focuses less on income and more on whether you own a home, your points and the lottery. Two similar apartments in the same area can call for entirely different preparation depending on this split.

Special supply: a share set aside for policy groups

Special supply is a block of units set aside, apart from general supply, for groups the government considers in particular need of housing support. The key point is that you compete only within your category, not against general applicants' points. Each category has its own conditions, such as length of marriage, number of children, income and past home ownership, and within a category order may be set by residence, number of children or a draw. As a rule a household can win special supply only once in a lifetime, so it pays to choose the complex carefully.

• Newlyweds: limits on years married and income
• First-time buyers: no one in the household has ever owned a home
• Multi-child households: based on the number of minor children
• Supporting elderly parents: households caring for older direct ascendants
• Agency recommendation: people such as veterans or disabled applicants put forward by an agency

General supply and ranks

What remains after special supply is general supply. Applicants are first sorted into first and second rank. First rank requires meeting conditions such as how long you have held the account, your deposit or payment record and, in some areas, being head of household or having no recent wins, and these conditions depend on where the housing is. Within first rank, residents of the local area get the first chance. Second rank comes into play only when first-rank applications do not fill the units.

How points and the lottery work together

For private general supply, units within first rank are split again into a points share and a lottery share. The points system scores years without a home, number of dependants and how long you have held the account, then picks from the top; the lottery draws at random among eligible applicants. The ratio between the two varies with unit size and whether the area is under regulation, so for applicants with low scores, size bands with a larger lottery share can be the realistic option. Even within the lottery share, homeless applicants may be considered first. A points calculator gives a rough idea of your score, but the official system makes the final call.

Reading the recruitment notice in order

The final authority for every rule is the recruitment notice published for each complex. The same system can apply different ratios and schedules from one complex to the next, so read the notice in full. It is long, and going through it in this order makes it easier not to miss anything.

• Number of units and unit types by supply category
• Eligibility and local priority rules
• Application dates for special supply, first and second rank
• Restrictions after winning and contract terms
• Sale price and payment schedule

A common mistake: ineligible winners

Worse than losing is being found ineligible after winning. Documents are checked after winners are announced, and if what you entered does not match the facts, the win can be cancelled and you may be barred from other applications for a period. The most common cause is judging home ownership by yourself alone, when homes or pre-sale rights held by other household members, and past wins, are often counted too. How dependants are counted, whether household registrations are separate and how residence periods are calculated also trip people up. If anything is unclear, ask the official help desk before applying.

Think beyond the win

Winning is the start of signing and funding, not the end. Depending on the complex there may be limits on winning again, a period during which you cannot resell, or a duty to live in the home yourself, so check these fit your plans. It is also safer to map out in advance how you will pay the deposit, interim payments and balance. This is a general guide to how the system is structured and is not investment or legal advice. Requirements, ratios and schedules change often, so always confirm with the official Korean subscription website run by the Korea Real Estate Board and the notice for the complex.