South Korea unveils package to boost housing supply, support young buyers

South Korea announced a package on Thursday to boost the housing supply and support young homebuyers, as part of efforts to stabilize the soaring housing market. The government, led by President Lee Jae Myung, also proposed higher taxes on wealthy homeowners, aiming to address his falling approval ratings due to rising house prices and stock market volatility.

The Financial Services Commission (FSC) revealed the package, which includes raising policy support for financing construction projects to 47.8 trillion won ($33.72 billion), up from the initial plan of 26.3 trillion won. The FSC also introduced financial support measures, such as new policy loans, for young people and newlyweds purchasing homes for living purposes, while tightening regulations on speculative demand.

With South Korea being one of the world's most indebted nations, the FSC plans to manage debt growth at approximately 3% this year, an increase from the previous target of 1.5%. President Lee's approval ratings dropped to a one-month low of 51% in a Gallup Korea survey on July 24, with housing market policy cited as a significant factor, following a month-long surge in house prices since November 2021.