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

On August 13, South Korea unveiled a package to bolster housing supply and aid young homebuyers amid efforts to stabilize the overheated housing market. President Lee Jae Myung's administration had previously suggested higher taxes on affluent homeowners, with his approval ratings declining due to surging property prices and stock market fluctuations.

The Financial Services Commission (FSC) announced an expanded policy support for construction financing, raising it to 47.8 trillion won (US$33.72 billion), up from the planned 26.3 trillion won, to spur housing supply. FSC also introduced assistance measures, including new policy loans, for young individuals and newlyweds purchasing homes for residence, while tightening regulations on speculative demand.

South Korea, one of the world's most indebted nations, has stringent borrowing rules to curb household debt, with the FSC aiming to manage debt growth at around 3% this year, up from the previous target of 1.5%. President Lee's approval ratings plummeted to a one-month low of 51% in a Gallup Korea survey on July 24, with housing market policy cited as a major factor after property prices surged by the highest amount since November 2021.