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Finance & Markets

The government plans to expand public guarantees for housing construction projects by 86 trillion won over the next three years. The Ministry of Land, Infrastructure and Transport announced on 31st that it will expand the guarantee for housing construction projects, which currently stands at 47 trillion won, to 133 trillion won by 2027. The ministry also plans to set up a 3 trillion won fund to normalize projects with financial difficulties. The move is aimed at stabilizing the housing construction market, which has been hit by a series of recent project financing(PF) failures. The ministry said that it will provide guarantees for project financing loans to construction companies, small and medium-sized builders and housing suppliers. The government also plans to provide guarantees for PF loans to support the normalization of projects with financial difficulties. The ministry said that it will also provide guarantees for loans to construction companies and housing suppliers. The government plans to implement the measures from next month. The move is expected to help stabilize the housing construction market and prevent a further decline in the construction industry. The ministry said that it will closely monitor the situation and take additional measures if necessary. The government also plans to provide support for small and medium-sized builders and housing suppliers. The ministry said that it will provide guarantees for loans to small and medium-sized builders and housing suppliers. The government plans to expand public guarantees for housing construction projects. The ministry said that it will expand the guarantee for housing construction projects. The government plans to set up a fund to normalize projects with financial difficulties. The ministry said that it will set up a 3 trillion won fund to normalize projects with financial difficulties. The move is aimed at stabilizing the housing construction market. The ministry said that it will provide guarantees for project financing loans. The government plans to provide guarantees for PF loans. The ministry said that it will provide guarantees for loans to construction companies. The government plans to implement the measures from next month.

Translated from Korean Read in Korean

hani.co.kr ·

The government has significantly expanded the public guarantee for housing construction, with a total of 86 trillion won for the next three years, according to the Financial Committee's announcement on the 'Financial Consolidation Measures for Real Estate Market Stability'. This includes the Korean Housing Finance Corporation (KHFF) and the Housing Development Fund Corporation (HDFC) collectively providing 28.7 trillion won annually, up from an average of 13.1 trillion won over the previous three years. The total loan guarantee limit for these projects will be up to 90% of the total project cost.

Moreover, a new funding system called the PF Normalization Support Fund, managed by the Korean Asset Management Corporation (CAMCO), has been established with an initial budget of 1.5 trillion won from the government and another 1.5 trillion won from the private sector. This fund aims to support the normalization of dishonest construction companies by providing financial assistance, with an estimated 18,000 households benefiting from it.

The PF Normalization Support Fund, along with private syndicated loans, is expected to support at least 20,000 households in normalizing dishonest construction projects. The financial industry is also expanding its own funds related to these issues, with the banking and insurance sectors increasing their pool from 1 trillion won to 5 trillion won. The Securities Industry is also contributing, planning to increase its fund to 10 trillion won.

In addition to financial measures, the government is also changing regulations related to housing supply. The self-capitalization ratio for PF-related implementations will be temporarily suspended until 2029, with the focus on accelerating housing supply. The guarantee system for KHFF will also be improved, with high-value housing projects including the cost of common areas in the guarantee, and the certification requirements for condominiums being expanded from 70% of housing to 70% of housing plus condominiums, respectively.

For repair projects, KHFF will introduce a new product for outsourced construction, and financial support will be strengthened for rental property owners. The principle is that for both new construction and rental property owners, the principle of prohibition will be extended to include situations where the purpose is the acquisition of property.

Written by urgent.news from Hankyoreh's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.

Read the original at hani.co.kr →

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From now on, those owning one house in the metropolitan area will not be able to get a lease loan if they do not have a record of living there after purchasing it. The Financial Services Commission announced on the 31st that it will implement measures to prevent the unfair use of lease loans by those who own multiple homes, starting from today. According to the announcement, from today, those who own one house in the metropolitan area and do not have a record of living there after purchasing it will not be able to get a lease loan. In the case of those who own one house outside the metropolitan area, they will be able to get a lease loan only if they have a record of living there after purchasing it. The regulation targets those who have purchased a house but have not moved in yet, as well as those who have purchased a house and are currently living in a leased house. However, those who have purchased a house due to unavoidable reasons such as a move for work or school, divorce, or the death of a family member, and have a record of living there, will be allowed exceptions. The Financial Services Commission explained that it will guide financial companies to voluntarily adjust their loan regulations to prevent the unfair use of lease loans by those who own multiple homes. The Financial Services Commission said, "We will monitor the loan practices of financial companies and take follow-up measures if necessary." The regulation applies to all lease loans, including those for apartments and commercial buildings. The Financial Services Commission emphasized, "This regulation is not aimed at limiting the rights of those who are in need of a lease loan for their actual residence, but rather at preventing multiple homeowners from taking advantage of the system."

·hani.co.kr

The volatility of the Korean won has been increasing, reaching levels comparable to those of emerging markets, as the exchange rate has experienced significant fluctuations, rising sharply before falling. The 22nd, according to the Bank of Korea, the won-dollar exchange rate's daily fluctuation rate, which was at around 0.6% in April, has more than doubled to 1.3% as of the 19th. This rate surpasses that of major countries; for instance, it is 0.8% in Japan, 0.7% in the United States, 0.5% in Germany, and 0.6% in the United Kingdom. The Bank of Korea attributes this to the won's tendency to follow the movements of emerging market currencies. A Bank of Korea official stated, "The recent sharp decline in the value of the won against the dollar, following its significant rise, indicates that the won is moving similarly to emerging market currencies." The won-dollar exchange rate dropped to 1,390.2 won on the 19th, a 9.3 won decrease from the previous day, and it continued to fluctuate on the 20th as well. The exchange rate, which had started at 1,382.5 won on the 19th, rose to 1,396.1 won at one point during the day, showing a fluctuation of up to 13.6 won. The intraday fluctuation rate, which had been 0.8% on the 18th, reached 1% on the 19th. The won-dollar exchange rate has seen a significant increase of 14.4 won over the past month, the largest among the G20 countries. In the past month, the won has ranked first in terms of decline among the G20 countries. The Bank of Korea plans to closely monitor the foreign exchange market and intervene if necessary to prevent excessive volatility. An official from the Ministry of Economy and Finance stated, "We will continue to take firm action against excessive speculation and market volatility."

·hani.co.kr

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