LH Implements Commitment to Purchase Unsold Houses in Public Housing Sites in the Seoul Metropolitan Area

Implementation of Purchase Commitment for Unsold Houses Targeting Private Housing
Constructed on LH Joint Residential Land in the Seoul Metropolitan Area

Korea Land and Housing Corporation (LH) announced that it will proceed with a purchase commitment for unsold private housing supplied on LH public land in the metropolitan area from the 19th of this month until December 31.

The metropolitan area public land purchase commitment is part of the "Plan to Expand Housing Supply for National Housing Price Stability" announced by the government at the "8th Real Estate Related Ministers' Meeting" on the 8th. It involves LH purchasing unsold private housing built on LH public land in the metropolitan area after completion. By alleviating the risk of unsold units, LH aims to accelerate housing supply in the private sector and resolve supply-demand instability in the real estate market.

The purchase commitment targets land where construction will begin by next year among the metropolitan area multi-family residential land supplied by LH. Approximately 36,000 housing units built on already sold or planned land in the metropolitan area, where land use is possible until next year, are the direct targets.

However, actual purchases will only be made for unsold housing remaining after completion. The purchase price will be applied differentially at 85% to 91% of the sale price, considering the unsold rate and household size. Housing acquired by LH under this purchase commitment will be supplied as private brand sale-conversion rental housing.

With LH's metropolitan area public land purchase commitment, it is expected that construction companies' decisions to start housing construction will become much easier. LH's credit enhancement will lower financing interest rates, and furthermore, conversion to the main project financing (PF) will be facilitated, greatly improving business conditions.

More detailed information on the purchase commitment criteria and procedures can be found in the announcement posted on the LH website starting from the 19th.

Lee Han-jun, President of LH, said, “The purchase commitment is a measure to relieve private construction companies' concerns about unsold units and to ease the anxiety of homeless low-income households about owning a home,” adding, “Along with LH's goals this year of 105,000 housing permits, 50,000 housing construction starts, and 50,000 new purchases, this purchase commitment will serve as a turning point to produce tangible results in stabilizing housing prices in the metropolitan area.”