Government Alarmed by Soaring House Prices... Plans to Increase Pre-Subscription Housing Units by About 100,000

Expansion to Private Sale in Public Housing Sites... Including Urban Public Housing Projects
Sequential Supply of 6,000 Units This Year and More Until First Half of 2024
71,000 Units in the Metropolitan Area Alone... Strong Remedy to Curb Follow-up Buying Sentiment

Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki is delivering a speech at the 29th Real Estate Market Inspection Meeting held at the Government Seoul Office in Jongno-gu, Seoul on the 25th. Photo by Hyunmin Kim kimhyun81@

[Asia Economy reporters Kangwook Cho and Sehee Jang] The government has decided to expand the pre-sale subscription to include privately sold apartments on public land and mixed urban public housing projects. Through this, it plans to increase the number of pre-sale subscription units by an additional 101,000 by the first half of 2024. Of these, 71,000 units will be in the metropolitan area. ▶Related article on page 3

On the 25th, the government held the 29th Real Estate Market Inspection Meeting with related ministers and announced the plan to expand pre-sale subscriptions on public land. Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, said at the meeting, "We plan to secure additional pre-sale subscription units significantly exceeding the current 62,000 units," adding, "We will establish an institutional foundation to provide incentives to participating private construction companies."

This government measure is interpreted as a response to the sharp rise in housing prices despite repeated government warnings about the 'peak of housing prices.' The intention is to suppress excessive speculative buying sentiment through signals of additional supply expansion.

So far, the pre-sale subscription units scheduled at 62,000 have all been public sales directly supplied by public enterprises such as the Korea Land and Housing Corporation (LH). With this plan, pre-sale subscriptions will be expanded to include private housing on public land, public redevelopment, and mixed urban public housing projects under the 2·4 urban development plan.

The government will first introduce pre-sale subscriptions for 8,7000 units of privately sold housing on public land by the first half of 2024, including an initial supply of 6,000 units in the second half of this year. Of these, about 60,000 units, or 70%, will be in the metropolitan area.

Additionally, the government plans to supply 14,000 more pre-sale subscription units through the ‘3080+ Public Project’ currently underway in the Seoul urban area. The initial supply targets 13 locations in Seoul that have met the district designation requirement with over two-thirds resident consent. The goal is to supply these in the second half of next year.

To encourage participation from private developers, the government plans to supply public land for sale on the condition that pre-sale subscriptions are conducted within six months. For the 64,000 units of waiting supply on already sold land where land use is possible but construction and sales have not yet started, the government will provide incentives for future land supply if the main sale subscription is conducted within six months after institutional reform.