[8.13 Real Estate Measures] Groundbreaking for New Housing Sites Shortened to Three Years in 'Supply Speed War'... Household Loan Cap Further Eased

Supply Effect of Over 230,000 Units in the Seoul Metropolitan Area
Groundbreaking for Gwacheon Racecourse and Taereung Country Club Starting in 2029
Public Guarantees for Project Financing Expanded to 23 Trillion Won This Year
Annual Househ

The government will shorten the period from announcing candidate sites for new public housing to breaking ground to 37 months, and will move up the construction start dates for idle urban sites such as Gwacheon Racecourse and Taereung Country Club to 2029. In an effort to stabilize the real estate market, authorities are launching a "supply speed race" to release the existing housing inventory into the market as quickly as possible. Financial support for accelerating housing supply will also be significantly expanded: the scale of public guarantees for real estate project financing (PF) will increase to 23 trillion won this year and 33 trillion won next year. The target for annual household debt growth will be raised from the previous 1.5% to 3% for this year, easing the burden for end users who have faced difficulties securing funds such as bridge loans.

On August 13, the Ministry of Land, Infrastructure and Transport, the Financial Services Commission, and other relevant agencies announced the "Measures for the Rapid Supply of Housing to Stabilize the Jeonse and Sales Market" and the "Comprehensive Financial Measures for Real Estate Market Stability."

According to the rapid housing supply measures, the government will reduce the period from announcing candidate sites to breaking ground for future new public housing sites to 37 months. The core initiative is to parallelize or shorten each step in land development, moving up construction starts by about 31 months. To date, it has averaged 5.6 years (68 months) from candidate announcement to groundbreaking for "third-generation" new towns and 6.9 years (83 months) for regular public housing; going forward, the intention is to break ground in about three years.

The pace of providing existing idle urban sites will also be accelerated. Construction of housing at Taereung Country Club in Nowon-gu, Seoul, as well as at Gwacheon Racecourse and the Counterintelligence Command site, will begin in 2029, earlier than previously planned. Gwacheon Racecourse will have a relocation plan drawn up within this month, and for Taereung Country Club, a World Heritage Impact Assessment is set to be completed within this year, with construction scheduled to start in September 2029.

The government will also continue to identify new public housing sites. By utilizing the Yeomchang Park site in Gangseo-gu, Seoul, and a 2.28 million-square-meter greenbelt area in Wabu-eup, Namyangju, it plans to supply 1,000 and 21,700 housing units, respectively, while securing 4,500 units in Jangji-dong, Gwangju, Gyeonggi Province. Additionally, the government intends to secure an extra 73,000 units (plus alpha) by identifying candidate public housing sites in prime locations.

The government expects these measures, including 100,000 new public housing units, to create an additional supply effect of 230,000 units (plus alpha) in the greater Seoul area. The plan is to accelerate housing starts toward the goal of 1.35 million units in the capital region between 2026 and 2030, as set out in last September's "9·7 Measures," while also increasing additional supply. On this day, the policy focused not just on additional supply, but also on speeding up actual groundbreaking for already-announced housing. The government believes the time gap between supply and demand is putting upward pressure on home prices.

Financial policy will support the speed of supply. The Financial Services Commission will expand public guarantees for real estate PF at viable sites from the originally planned 16.9 trillion won to 23 trillion won this year, and to 33 trillion won by 2027. The idea is to support financing for commercially viable PF projects and thus expedite the start of housing developments.

Support for restarting stalled projects will also increase. An additional 3 trillion won (plus alpha) will be added to the Korea Asset Management Corporation (KAMCO) PF normalization support fund, and the scale of PF syndicate loans, participated in by the five major banks and insurers, will be expanded from 1 trillion won to 5 trillion won. PF funds independently raised by the financial sector will also grow to 10 trillion won. Through KAMCO fund support, the Financial Services Commission expects housing supply to be accelerated by at least 18,000 units, while expanding syndicate loans would accelerate another minimum 20,000 units—for a combined minimum supply boost of 38,000 units.

The financial capacity of genuine end users will also be broadened. The Financial Services Commission will manage the year-on-year growth rate of total household debt across all financial sectors at 3%, up from the originally planned 1.5%. Calculated simply, this means the net annual increase in household loans by financial institutions will rise from about 30 trillion won to 60 trillion won. The government intends to focus this expanded lending capacity on supporting bridge and balance loans for reconstruction and redevelopment, interim and final loans for new apartment complexes, and targeted support for young people and genuine end users.

Yoonduk Kim, Minister of Land, Infrastructure and Transport, stated, "To normalize housing supply, the public sector will act more quickly where necessary, and we will aggressively support areas where the private sector has strengths, ensuring sufficient and timely supply of housing in places people want." Okwon Lee, Chairman of the Financial Services Commission, emphasized, "We have focused on strengthening the financial system's role in promoting housing supply and supporting youth and other end users. We will thoroughly monitor whether the expanded guarantees and large-scale fund support actually lead to groundbreaking, and whether they provide real assistance to young people and end users, and make prompt improvements if shortcomings are found."

This content was produced with the assistance of AI translation services.