Kim Yoonduk, Land Minister: "Commencing New Town-Scale Housing Each Year... LH Quality Remains a Challenge" [Real Estate AtoZ]

"Extraordinary Supply Measures to Address Housing Shortage in the Seoul Metropolitan Area"
Lee Jaemyung Administration Differentiates with 'Construction Commencement' as Supply Standard
Supplementary Financial and Tax Measures to Be Considered If Ne

Kim Yoonduk, Minister of Land, Infrastructure and Transport, stated on the 7th regarding the government's newly announced plan to supply 1.35 million housing units in the Seoul metropolitan area over the next five years, "This amounts to an annual average of 270,000 units, which is equivalent to building a first-generation new town every year," adding, "By introducing a construction commencement standard, we will ensure the supply is tangible for the public."

During his opening remarks at the Real Estate Ministers' Meeting held at the Government Seoul Office Building in Jongno-gu, Seoul, Kim said, "In the Seoul metropolitan area, the housing supply, which has contracted since 2022, has not yet recovered," and added, "We have prepared extraordinary supply measures to fundamentally address the housing shortage in the metropolitan area."

Minister Kim highlighted the adoption of the 'construction commencement standard' as the key differentiator of this plan. He explained, "In the past, fragmented targets were set for each project, or supply figures were presented based on various criteria such as permits, sales, or construction starts, which often felt disconnected from reality," and continued, "The Lee Jaemyung administration will pursue sufficient and continuous supply in highly desirable locations, based on the consistent standard of construction commencement."

"LH to Implement Directly, Quality Remains a Challenge... Strengthening Public Interest Does Not Mean Only Expanding Rentals"

Kim Yoonduk, Minister of Land, Infrastructure and Transport, is announcing measures to expand the supply of residential real estate at the Government Seoul Office Building on the 7th. Photo by Yonhap News

In the subsequent policy briefing, Minister Kim addressed the approach of having Korea Land and Housing Corporation (LH) directly implement public land development instead of selling it to private entities. He said, "The private sector may become passive depending on market conditions and financing, but LH faces no such constraints," adding, "By strengthening public interest, we can secure both volume and speed." However, he acknowledged, "Given public concerns about the quality of LH apartments, we will collaborate with private construction companies to supply high-quality housing."

Regarding concerns that strengthening public interest could mean simply expanding rental housing, he clarified, "Having the public sector take the lead does not mean only increasing public rentals," and added, "While public rentals will be included, we will also pursue public sales, reflecting market demand and public expectations." Minister Kim further stated, "In the process of enhancing public interest, LH's financial health and sustainability must also be reviewed," and explained, "This issue will be addressed in conjunction with LH reform discussions, and the proportion of rentals and sales will be adjusted over the medium to long term."

Comparing the new plan to the previous administration's August 8th measures, he noted, "Of the 80,000 units planned at that time, 50,000 are already in progress, and 30,000 will be announced separately around the end of the year," adding, "This new plan includes measures to raise the floor area ratio for public urban complex projects by 1.4 times and for public redevelopment and reconstruction projects by 1.3 times. The increase in the floor area ratio for private redevelopment projects will be decided through public discussion."

"Guarding Against Both Sharp Rises and Falls in Housing Prices... Blocking Speculative Demand"

Regarding the government's view on housing market stability, Minister Kim said, "In the short term, we do not want to see housing prices surge or plummet," and added, "We aim to block speculative demand and hope that a sufficient supply of quality housing will gradually stabilize the market."

He also stated, "If necessary, we will prepare supplementary tax and financial measures," and emphasized, "We will establish a special investigation team within the Ministry of Land, Infrastructure and Transport and cooperate with the National Tax Service, police, and Financial Supervisory Service to block illegal transactions and speculative demand."

Minister Kim concluded, "We have mobilized the full capacity of the government for this plan," and added, "We will turn public concern into expectation and hope. We will stake our reputation to earn the public's trust."