South Korea to add 230,000 homes to support young buyers as prices rise for 13th straight month
South Korea will nearly double state-backed financing for housing construction to 47.8 trillion won (US$33.7 billion) and ease mortgage rules for young buyers, the Financial Services Commission said Aug. 13.
South Korea plans to construct an additional 230,000 homes in the Seoul metropolitan area amid rising property prices for the 13th consecutive month, according to a report by Reuters. The Ministry of Land, Infrastructure and Transport announced measures to expedite development on public land, ease greenbelt restrictions, and support private projects to bolster supply.
President Lee Jae Myung emphasized the need to address the property bubble, describing real estate as a potential threat to household livelihoods and the nation's future. The Financial Security Commission (FSC) increased its household debt growth target for the year to around 3% from 1.5%, freeing up approximately 30 trillion won in additional lending capacity in the second half.
The FSC will retain existing loan-to-value and debt-service ratio rules while ensuring the tighter lending regime does not hinder credit to genuine homebuyers or new construction. New policies will include a longer-term mortgage for young borrowers, a guarantee product for jeonse deposit refunds, and broader use of future income in debt-service calculations.
Newlyweds will retain policy loan eligibility based on individual circumstances. The government aims to secure land and compress permitting procedures, including rewriting laws and regulations if necessary. Home purchase prices in Korea rose 0.33% in June, the highest monthly increase since November 2021.
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