I. Introduction: a sobering look at the subscription box exodus theory

recently, the housing subscription market has been experiencing an intensification of the 'subscription account exodus' phenomenon. according to data from the Korea Real Estate Agency's Subscription Home, the number of subscription passbook subscribers has dropped by more than 505,343 in a year, and has been declining for 29 consecutive months since June 2022. the main reason behind this exodus is the steeply rising sales prices and the resulting frustration.

according to Housing and Urban Guarantee Corporation (HUG) statistics, the average selling price of a private apartment in Seoul reached a record high of 47.2 million won per square meter at the end of November 2023. with these rising prices, it's no wonder that many one- and two-person households are becoming unable to afford the down payment, let alone the balance, even if they win the lottery. to make matters worse, in 2024, the average winning cutoff for private condominiums nationwide will be 50.9 points, 63 points in Seoul, and as high as 72 points in Gangnam 3, making winning an offer seem like a "shot in the dark" for the average homebuyer.

however, experts strongly advise against canceling your subscription account at this time. this is because they should be viewed as "insurance for future housing supply" and "a high-interest, long-term financial vehicle," not just a "winning lottery ticket." By closing them out of frustration at the current high barriers, they are giving up one of the most powerful and controllable weapons in the future housing market. Beyond the personal financial losses, this could lead to policy risks that could undermine the foundation of the housing supply system in the long run, as the main source of funding for the Housing and Urban Fund is eroded.

II. Part 1. Overwhelming Financial Advantage: Beyond Savings Accounts and Bank Interest

1. maximizing the compounding effect of policy rate hikes

while many people undervalue savings accounts as a financial vehicle, they are the only "policy-backed savings" that the government continues to offer preferential interest rates to stabilize the Housing and Urban Fund. the government has raised interest rates by a total of 1.3 percentage points from November 2022 to 2024 in order to prevent an exodus of subscribers. As a result, the interest rate on general housing subscription savings has risen from 2.0% to 2.8% per annum to 2.3% to 3.1% per annum.

these rates are on par with or even higher than the interest rates on regular savings accounts at commercial banks, allowing you to enjoy a stable compounding effect over a long period of time. In particular, high-interest savings products at commercial banks are often short-term (less than one year) special offers or require stringent preferential conditions for marketing purposes. a savings account, on the other hand, offers a stable interest rate over a long period of time with no special conditions, while also building up savings points.

2. a must-have financial product for young adults: 4.5% APY plus the Dream Loan

for young adults between the ages of 19 and 34, the financial value of a savings account is even more overwhelming. that's because the Youth Housing Dream Savings Account offers a 1.7 percentage point premium over the standard savings account, earning up to 4.5% APY. that's on par with the best savings accounts on the market today, and it's also a hedge against inflation because you're getting a guaranteed interest rate for the long term.

the Youth Housing Dream Savings Account is more than just a high-interest savings product; it's a policy package deal that provides low-interest financing for a home purchase if you win. if you win the subscription, you will be eligible for the Youth Housing Dream Loan, which provides up to 80% of the purchase price of a home priced at KRW 600 million or less with a floor area of 85 square meters or less, at interest rates ranging from 1.5% to 4.55% per annum.

young adults who are already enrolled in the existing subscription account need not be disappointed, as the government is allowing them to switch to the Youth Dream Account to expand their benefits, and in particular, the payment amount and ranking of the existing account will be recognized when applying for private sales.while it's a loss to close and open a new one, converting your existing savings to the enhanced Youth Dream Savings Account is the smartest strategy to take advantage of the 4.5% higher interest rate while getting your time recognized.

comparison of interest rates and features for our main savings products (focusing on the Youth Dream Savings Account)

product Categorymaximum interest rate (APY)key Featureskey Benefits youth Housing Dream Savings Account 4.5 earn application points link to low-interest Housing Dream loan general Housing Pledge Savings 3.1 earn subscription points income deduction for year-end settlement (up to KRW 3 million) commercial bank savings account (top special edition) 7%~8% range saving money strict preferential conditions (marketing, first transaction, etc.)

III. Part 2. The Value of Your Time: Don't Miss the 'Sign-up Period' Strategy

1. 17 out of 17, only the 'time premium' solves it

the most essential reason not to close a subscription box is the "time premium" it offers. the subscription points system (totaling 84 points) is composed of a homelessness period (32 points), number of dependents (35 points), and subscription period (17 points).of these, the length of time without housing and the number of dependents are determined by external factors beyond the individual's control, such as age, marriage, and family situation.

however, the subscription period is the only value-added item that is completely within the individual's control, with a full score (17 points) achieved by maintaining the subscription for at least 15 yearswithout canceling it.the reality that the winning cutoff is nearly 72 points, especially in the highly competitive Gangnam 3 district of Seoul, proves that the 17-point passbook actually provides a key competitive advantage in the subscription race. contrary to the expectation that competition would ease as low-scoring subscribers churned, the reality is that competition for high-scoring subscribers has become extremely fierce, making the perfect score an ultra-scarce asset whose value skyrockets beyond the monetary rate of interest.

the moment you close your subscription, you lose all the points you've accumulated to zero. you're giving up your future homebuying options, and you're giving up the competitive edge that only time can give you. homebuying is a long-term marathon, and maintaining a passbook is the only way to secure the most predictable and essential score in that marathon.

2. the only option for future housing supply cliffs

while the subscription market is currently stifled by high prices and regulations, the long-term outlook for housing supply only adds to the value of subscription passbooks. According to the Real Estate R114 survey, rising construction costs (with the Construction Cost Index increasing by more than 30% from 2020) and cost drivers such as zero-energy building mandates will continue to drive up future prices.

even more serious is the concern of a future supply cliff. homes take a minimum of three to five years from construction to occupancy, and the decline in supply in recent years translates into a decline in move-in volumes beyond 2025. the annualized supply of move-ins in the metro area is projected to reach 69,642 units in 2026, the lowest since 2014.as supply becomes scarce, competition for applications becomes more intense, and upward pressure on sales prices intensifies.

in this situation, long-term savers will have a strong competitive advantage, which means they will have the strongest "option" to purchase a home in the future. Given the paradox that today's high sales prices may become relatively affordable in the future, saving is an act of long-term asset value protection.

IV. Part 3. Savvy Savings Tips: Reduce the Burden, Maximize the Benefits

1. public vs. private: Strategically utilizing the KRW 250,000 payment allowance

when the government raised the monthly contribution limit for subscription passbooks from 100,000 won to 250,000 won to secure the Housing and Urban Fund, many subscribers felt the pressure to contribute 250,000 won every month.however, you can flex your payment strategy depending on your savings goals.

subscribers should pay different amounts depending on whether they are targeting public housing or private housing.

• when targeting public housing: public housing winners are selected based on the length of time without housing, the number of payments, and the total amount of payments. Therefore, it is absolutely advantageous to maximize the monthly payment limit of 250,000 won to increase the total amount of payments.

• when targeting private sales: for private sales, you onlyneed to meet the deposit threshold amountset by region and area to generate an application ranking.once the deposit is met, the number or total amount of payments doesn't matter, so you don't have to meet the 250,000 won per month, but can pay the minimum amount to gain financial flexibility.

strategies for utilizing your contribution credit (private vs. public)

categoryfor private subscriptionfor public offerings important factors meeting the deposit threshold by region (regardless of the number of payments) number of payments and total amount of payments (up to $250,000 is important) monthly payment strategy pay only the minimum amount after meeting the deposit (financial flexibility) we recommend paying the maximum of $250 per month goal earn points and deposit secure number of payments and total amount credited

2. use a mortgage instead of canceling, and benefit from year-end settlement

one of the most realistic reasons to consider closing a savings account is a sudden need for emergency funds. instead of giving up your hard-earned savings, you can "defend your savings" by using a savings account mortgage.

you can borrow up to 95% of your savings, and the interest rate is around 2% APR, which is significantly lower than other lending products.the loan is a practical alternative that helps you avoid the risk of losing the "time premium" that occurs when you close your savings account, and provides a low-cost way to keep your subscription open.

plus, even if you're unlikely to win, a savings account provides a solid financial benefit every year. if you're a homeowner, you can claim 40% of your contributions as a tax deduction at the end of the year, and last year, the tax deduction limit was increased to $3 million, making the savings even more substantial. the opportunity cost of canceling is very high because you get the best of both worlds: winning the subscription (uncertain future gain) and the tax deduction (certain gain each year).

V. Conclusion: subscription passbooks, the 'future home purchase option'

the pessimism of the current real estate market and the high thresholds for winning are enough to make you think about closing a savings account, but understanding the intrinsic value of a savings account can help you realize how much of a future loss a decision to close can be. a savings account is a comprehensive financial product that offers a high interest rate of up to 4.5% per annum, is linked to an incredibly low-interest policy loan (the Youth Housing Dream Loan) if you win, and provides an annual tax deduction to improve your cash flow.

above all, the subscription period (17 points) is the most powerful weapon in the future housing race that only 'time' can solve. the more unstable the market becomes and the more we worry about a supply cliff, the more the 'time premium' of those who have held their passbooks for the long term will shine through.

if you're on the fence about closing right now, you should maximize your benefits by using a mortgage or converting to a Youth Housing Dream Savings Account if you're in financial difficulty. keeping your savings account is the smartest and most essential long-term investment you can make to ensure you have at least some 'reserves' and 'options' in the future housing market. your savings account will have zero value the moment you close it, but it will function as a potential home-buying option the moment you keep it. We strongly advise you not to give up your future options because of immediate difficulties.