Won Hee-ryong: "Housing Supply Contraction an 'Initial Emergency Situation'... Will Take Action"

Housing Supply Innovation Committee Convened After 9 Months

On the 29th, Won Hee-ryong, Minister of Land, Infrastructure and Transport, judged the contraction in housing supply as an 'initial emergency situation' and announced that he would take full-scale measures in response.

[Image source=Yonhap News]

After concluding a meeting of the Housing Supply Innovation Committee at the Housing and Urban Guarantee Corporation (HUG) Seoul Western Branch, Minister Won said, "As interest rate conditions, rising costs, and a contraction in pre-sale demand accumulate, the overall supply speed is slowing down," adding, "This is clearly a situation that requires an initial emergency alert." He emphasized, "We will examine the financial and supply aspects to prevent an overall supply bottleneck and will enter into full-scale consultations with financial authorities and macroeconomic authorities."

The Housing Supply Innovation Committee is an organization composed of private experts established to prepare a concrete plan for the Yoon Seok-yeol administration’s national agenda of supplying 2.5 million housing units, and it was convened after nine months.

Minister Won viewed the current housing supply situation as not immediately severe but one that requires caution against supply shortages. He said, "The situation has not progressed to a second or third phase, and supply contraction was considered a lower priority in housing policy, but it has been judged that it must now be addressed as a current issue."

Some experts attending the meeting pointed out that supply shortages could become a long-term problem.

One committee member stated, “There are 60,000 unsold units accumulated, while on the other hand, there are pre-sale competition rates of 300 to 1,” and added, “The market reacts not to the total volume but locally, so the government must manage market anxiety with appropriate messaging and policies.”

In the first half of this year, the number of housing permits was 189,213 units, down 27.2% compared to the same period last year, and housing starts were 92,490 units, a decrease of 50.9%. Typically, housing supply occurs 2 to 3 years after construction starts and 3 to 5 years after permits are issued. If this trend continues, concerns arise that a supply shortage could occur in 2 to 3 years.

Minister Won stated, "There were many remarks that policy authorities need to be more vigilant than now in the sense that sufficient measures must be prepared in advance to respond."

Regarding concerns that the public pre-sale and 3rd new town supply might be delayed due to the Korea Land and Housing Corporation (LH) rebar omission scandal, he said, "Policy authorities will demonstrate through actions that they are overwhelmingly addressing the parts of the market that are causing concern."