Minister Kim Yoonduk: "We Must Achieve Both Targets and Price Adjustments for Newly Built Purchase Rental Housing" (Comprehensive)

Kim Yoonduk: "Focusing on Supplying Housing for Young People in the Metropolitan Area"
Record High of 54,000 Units Secured
Supply Volume Up 128% Year-on-Year

The Ministry of Land, Infrastructure and Transport and Korea Land and Housing Corporation (LH) achieved a record high of 54,000 units in newly built purchase rental housing agreements last year, which is expected to accelerate the supply of public rental housing in the Seoul metropolitan area. In addition, in response to suspicions raised last year by President Lee Jaemyung regarding LH's alleged purchase of properties at inflated prices, a comprehensive investigation has been launched to enhance the transparency of the system.

On January 28, Minister of Land, Infrastructure and Transport Kim Yoonduk visited a youth-oriented newly built purchase rental housing site in Jongno-gu, Seoul, and emphasized, "The new government's housing welfare policy aims to dispel the image that public housing is cheap and of poor quality, ensuring that people can recognize public housing as being high-quality both in quantity and quality."

Kim Yoonduk, Minister of Land, Infrastructure and Transport, visited the site of the youth-oriented newly built leased housing in Yeonji-dong, Jongno-gu, Seoul, on the 28th, held a meeting with the young residents, and is speaking. Photo by Yonhap News Agency

He added, "We are striving to supply high-quality housing in locations such as areas near subway stations and with community spaces, where young people would want to live. We are focusing on increasing the supply of housing for young people in the metropolitan area."

According to the project results released by the Ministry, a total of 53,771 units were secured through newly built purchase agreements last year. This represents a 128% increase compared to the previous year's 41,955 units, marking the highest performance ever. Approximately 48,000 units were in the metropolitan area, with 15,000 units secured in Seoul. The newly built purchase rental program involves LH purchasing homes under construction or planned by the private sector after completion and supplying them as rental housing. The majority are non-apartment types, such as single-unit apartments, multiplexes, and row houses.

Based on the secured volume, the Ministry plans to begin construction on more than 44,000 newly built purchase rental units in the metropolitan area this year, including 13,000 units in Seoul. As previously announced in the September 7 supply plan last year, the Ministry aims to start construction on 70,000 units by 2027 and 140,000 units by 2030, and is committed to achieving these targets without delay. Additionally, this year, the Ministry will recruit tenants for 11,000 purchase rental units in the metropolitan area, including 3,000 units in Seoul. Of these, 60% are expected to be supplied to young people and newlyweds.

The Ministry also intends to address the previously raised suspicions of inflated purchase prices through a comprehensive investigation. At the Ministry's work report in December last year, President Lee Jaemyung pointed out, "There are rumors that a house worth 100 million won is being sold to LH for 120 million won as a rental property," raising concerns that LH was purchasing new homes from the private sector at high prices for its rental business. The Ministry has decided that LH will form an investigation committee centered on external experts and conduct a full investigation by April. In addition, the Ministry is working to reform the system for determining purchase prices of newly built purchase agreement homes.

However, there are concerns that revising the price determination standards could discourage the securing of supply. Regarding this, Minister Kim responded, "This year, we are taking an aggressive approach to expanding newly built purchase rental housing. We are in a situation where we must achieve both our targets and price adjustments, and we will do our utmost to accomplish both."

Regarding the direction of newly built purchase rental housing, the Ministry is also considering diversifying housing types by linking them with urban block-type housing. Minister Kim stated, "I hope that newly built purchase rental housing will develop into various forms, like those found overseas, rather than monotonous, box-shaped units. We actively support the creation of new housing cultures, such as urban block-type housing."