Kwon Daeyoung: "Expanding Financial Support for Housing Supply... Financial Sector Must Actively Provide Funding"

KAMCO Fund Invests 60.5 Billion Won to Normalize 300 Billion Won Insolvent Projects
Government Plans to Establish New 3 Trillion Won Fund

Kwon Dae-young, Vice Chairman of the Financial Services Commission, visited a site where business had resumed through the Korea Asset Management Corporation (KAMCO) Real Estate Project Financing (PF) Business Site Normalization Support Fund. He announced plans to expand financial support to promote the supply of housing and urged the financial sector to proactively provide funding.

On September 17, Kwon visited an apartment construction site in Mapo District, Seoul, where he inspected the progress of the project and listened to difficulties and suggestions related to financing. He then held a meeting with representatives from the Financial Supervisory Service, Korea Asset Management Corporation (KAMCO), and fund management companies to review the operating performance of the KAMCO Fund and examine plans for creating new funds.

This visit followed Chairman Lee Eok-won’s inspection of a normalized business site on September 10. The Mapo District project visited by Vice Chairman Kwon had been at risk of insolvency in the second half of 2022 due to instability in the PF market, a slowdown in the real estate sector, uncertainties in the presale market, and a rise in construction costs. However, the injection of KAMCO Fund capital and business restructuring brought about its normalization. A total of 60.5 billion won in fund capital was invested to normalize insolvent residential projects valued at approximately 300 billion won. Currently, all of the planned 1,780,000 housing units in these projects have been fully presold, and construction is ongoing.

Kwon stated, “The KAMCO Fund fundamentally improved the business viability through measures such as repurposing projects and replacing construction companies, laying the foundation for attracting private sector capital.” He assessed the initiative as “a prime example of the fund acting as a catalyst for the normalization of troubled business sites.”

The government is preparing to create a new KAMCO Fund worth about 3 trillion won and will inject 1.5 trillion won in fiscal support for this purpose. Kwon noted, “If 60% of the new KAMCO Fund, which is planned to be the main investment share, is invested in residential projects, we expect the supply of approximately 18,000 housing units.” He added, “We will seek various financial support measures to stimulate housing supply.”

According to KAMCO, the existing KAMCO Fund established in September 2023 with a scale of 1.1 trillion won has so far completed investments totaling 819.3 billion won. Of this amount, 373 billion won has been invested in residential projects, with around 3,881 housing units expected to be supplied.

Jung Junghoon, CEO of KAMCO, said, “In line with the government’s August 13 real estate measures, KAMCO will swiftly establish a new 3 trillion won fund by the first half of next year,” emphasizing, “We will firmly support the vitality of the housing supply and the construction and financial ecosystems.”

The Financial Supervisory Service has selected 325 PF business sites in the Seoul metropolitan area as closely managed targets, assigning officials to each site and continuously monitoring progress. Projects suffering from financial distress or temporary liquidity shortages will be rapidly normalized by linking them to the KAMCO Fund and other financial support solutions.

Kwon stated, “I hope the private financial sector sees the normalization of troubled business sites as a new investment opportunity,” and urged, “To overcome the challenge of insufficient housing supply, the financial sector must deliver robust funding to support housing provision.”

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