"Expanding Housing Supply through Purchase Lease? LH Aims to Achieve 3% Target [2024 National Audit]"

LH New Purchase Rental Supply Target
Supply Volume This Year: 1,811 Households, 3% Above Target

The supply of newly constructed purchased rental housing by Korea Land and Housing Corporation (LH) is steadily decreasing. Although this year's target supply volume has increased by 170-230% compared to previous years, the actual performance against the target is only 3%. The government has announced plans to supply more than 110,000 purchased rental units by next year, but critics point out that the reality falls far short of this goal.

According to data received by Maeng Seong-gyu, a member of the National Assembly's Land, Infrastructure and Transport Committee and chairman of the committee from the Democratic Party of Korea, from LH on the 10th, the performance of the new construction purchase contract project this year was 1,811 units as of July. This performance has continuously declined from 16,254 units in 2021, 11,830 units in 2022, and 4,439 units last year.

The achievement rate against the new construction purchase contract project target has also decreased annually: 56% in 2021, 40% in 2022, and 19% in 2023. In particular, the achievement rate for this year, counted up to July, was the lowest at 3%. On the other hand, LH's supply targets have steadily increased: 28,880 units in 2021, 29,166 units in 2022, 22,197 units last year, and 50,190 units this year.

LH purchased rental housing refers to housing that LH buys from the private sector and supplies at rents lower than market prices. Among these, new construction purchases involve LH buying newly built houses to supply. The Ministry of Land, Infrastructure and Transport announced through the '8·8 Supply Plan' that the supply of purchased rental housing will be increased to more than 110,000 units by this year and next year.

An LH official stated, "New construction purchases undergo review and evaluation before housing construction, so contracts are often canceled due to rising raw material prices or a downturn in the construction market." He added, "Although applications increased to over 100,000 units by August this year, it takes a long time for contracts to be finalized, so the performance has not yet been reflected. Supply volume is expected to increase in the fourth quarter of this year as performance is reflected." He also said, "We are working to achieve purchase targets by increasing related personnel from 159 to 235, mainly in the metropolitan area."

Assemblyman Maeng said, "The Ministry of Land, Infrastructure and Transport has increased the new construction purchase plan from 75,000 units to more than 110,000 units for this year and next year, but the current stock of newly constructed purchased rental housing is less than 30,000 units." He added, "The current system should be reviewed to devise measures to increase the supply of purchased rental housing."