South Korea announces real estate measures to boost supply and curb speculation

South Korean financial and land authorities have announced comprehensive measures to stabilize the real estate market by simultaneously expanding housing supply and curbing speculative investment.

The Financial Services Commission is increasing real estate project financing (PF) guarantees from 26.3 trillion won to over 47.8 trillion won to prevent a supply shortage. To support the construction industry, the regulation on the equity ratio for residential PF projects, originally set for next year, has been deferred to 2029. Additionally, the government is targeting a 3% growth rate for household debt to prioritize lending for actual homebuyers and youth housing support.

To prevent gap investment, new jeonse (lease) loans and extensions will be restricted for non-resident single-homeowners in the Seoul metropolitan area and regulated zones. However, exceptions may be made if a financial institution's credit committee recognizes unavoidable non-residency reasons.

The Ministry of Land, Infrastructure and Transport aims to accelerate the supply process by reducing the time from site announcement to groundbreaking from 68 months to 37 months. Plans include early groundbreaking for 89,000 units in the 3rd Generation New Cities and providing incentives for rapid development. For younger generations, the government will introduce the ‘Youth Future Bogeumjari Loan’ for non-apartment homes priced under 400 million won to facilitate easier entry into the housing market.