Kim, a 33-year-old office worker planning to marry early next year, recently applied for special allocation at the Magok District 17 land-lease housing complex offered by Seoul Housing & Communities Corporation (SH), but was unsuccessful. The competition ratio for the youth special allocation, which Kim and his fiancée each applied for, reached 164 to 1. Despite failing to win, Kim plans to try again for the Godeok Gangil 3 complex subscription scheduled for the second half of this year. "Most Seoul apartments cost around 1.5 billion won these days, and even new complexes have very high sale prices," Kim said. "I'm very interested in public housing, especially land-lease housing that requires less initial capital."
According to the real estate industry on the 16th, public housing options requiring lower initial capital—such as land-lease housing and equity accumulation housing—are becoming alternatives for young people and newlyweds struggling with expensive home prices and high sale prices. While supply volumes are limited, these options are gaining attention for being significantly cheaper than private apartments and requiring less upfront capital amid tightened lending regulations.
Land-lease housing supplied by SH, where the government retains land ownership and sells only the building, is called "half-price apartments" due to significantly lower sale prices. The eligibility for Didimdol loans (up to 60% LTV) is also cited as an advantage, reducing initial capital burden even under stricter lending rules. However, critics point out that residents must pay monthly land rent and cannot benefit from land value appreciation since they don't own the land.
The Magok 17 complex in Gangseo-gu, Seoul, which held special allocation subscriptions last week, saw massive demand from young applicants. For 162 special allocation units, the youth category recorded 164-to-1 competition, while the newlywed category reached 101 to 1. The 59-square-meter units at Magok 17 were priced in the 300 million won range. However, residents must separately pay 600,000 to 700,000 won monthly in land usage fees. SH plans to supply 215 units at Godeok Gangil 3, another land-lease complex, in October. High competition is expected, as some categories exceeded 100-to-1 ratios during the 2023 preliminary subscription.
Gyeonggi Housing & Urban Development Corporation (GH) will also debut equity accumulation housing this year in Suwon's Gwanggyo New Town. Of the 600 units at Gwanggyo Block A17, scheduled for subscription in October, 240 units—40% of the total—will be offered under this model. Buyers initially acquire only 20-25% of the home's equity at move-in, then purchase the remaining shares over up to 30 years. Until full equity is secured, a co-ownership structure with the public entity is maintained. A five-year residency requirement and 10-year resale restriction apply, and early sellers must share a portion of capital gains with the public. While some view potential gains skeptically, many see it as a viable option for young people's housing stability.
Korea Land and Housing Corporation (LH) plans to supply 3,563 profit-sharing housing units this year across four blocks in third-generation new towns including Bucheon Daejang, Suwon Dangsu, and Goyang Changneung. Under this structure, if residents sell back to the public after living there for a certain period, gains or losses are shared. After the five-year mandatory residency, sellers receive 70% of capital gains while LH takes the remainder.
Experts advise that as rising home prices and sale prices make homeownership increasingly difficult for young people and newlyweds, there is a need to diversify housing models—including land-lease and equity accumulation housing—beyond long-term jeonse and rental housing, while also increasing supply. Park Won-gap, chief real estate specialist at KB Kookmin Bank, said, "As private sale prices have risen sharply and accessibility has declined, young people and newlyweds are increasingly choosing public housing as a realistic alternative." He added, "As the capital required for young generations to purchase homes has grown, various approaches like land-lease and equity accumulation models are meaningful in terms of expanding housing supply." Another expert, who requested anonymity, noted, "While the advantage of lower sale prices exists, careful consideration is needed as conditions differ—including land rent, additional equity purchase costs, and long-term resale restrictions." The expert added, "To achieve effectiveness as a housing model, supply needs to increase over the long term."