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Winning the lottery, or Lotto in Korean, is a dream for everyone. In Korea, there's another type of life-changing lottery — a housing application scheme that can yield significant profits just by being lucky enough to be chosen as a successful bidder for an apartment unit.

From July 29 to 30, a total of 2.94 million Koreans vied for a single apartment in the Lotte Castle apartment complex in Hwaseong's Dongtan neighborhood, Gyeonggi Province. The winner was given the opportunity to purchase an 84-square-meter apartment for 482 million won ($354,359), the same price as when it was first sold in 2017.

The price is about 1 billion won cheaper than its current market value, indicating that the winner could make a substantial financial profit if they choose to sell it.

Anyone aged 19 or older could apply, regardless of whether they had a housing application scheme account. Due to the low barrier of entry, the housing application website was overwhelmed, with over 7 million people visiting over the two days.

The answer to this once-in-a-lifetime opportunity lies in the price cap system that was implemented by the government in 2005. The application scheme system was introduced to curb property speculation and assist homebuyers in securing a house as prices soared following the liberalization of house prices in 1999.

In public housing sites and regulated areas (currently, Yongsan, Gangnam, Seocho and Songpa districts in Seoul), sale prices are capped at a certain level.

However, due to the recent surge in construction costs and house prices, a significant gap has emerged between market prices and supply prices (the price offered by the government) under the price ceiling system.

Contrary to its initial aim, the system is thereby driving speculative demand, experts said.

"With sale prices set more than 30 percent below the market prices of apartments nearby, even those who were not previously interested are now applying, driving up competition," Kim In-man, the head of Kim In-man Real Estate and Economics Institute, said.

If unsold units become available through random selection, as observed in Dongtan, a rush of indiscriminate applications could cause market distortions as well.

"The increased competition lowers the chances for people who really need housing to secure a unit," Kim added.

Digging deeper, this trend is driven by a rebounding housing market and fears of a housing shortage in Seoul.

According to KB Land, apartment prices in Seoul rose by 0.56 percent in July compared to the previous month, while nationwide prices increased by 0.02 percent. Notably, the sales price outlook index for Seoul reached 127, surpassing the baseline of 100, indicating heightened expectations for price increases.

"There will start a series of subscriptions for apartments, subject to price caps, in Seoul's affluent Gangnam District, starting from the second half of this year. It is unlikely that the overheated subscription market will cool down anytime soon," an industry official said.