Korean gov't to ease regulations to supply 2.7 million new houses by 2027

[Photo by Park Hyung-ki]

The new South Korean government under President Yoon Suk-yeol will ease regulations on urban redevelopment and reconstruction to provide 2.7 million houses nationwide over the next five years and drive private sector-led housing supply.

According to a plan unveiled at a real estate-related ministerial meeting presided over by Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho on Tuesday, the government will provide 1.58 million houses in the greater Seoul area and 1.12 million in other areas nationwide by 2027.

This is the first house supply plan under the Yoon administration, which is a shift from the previous administration’s ‘demand restriction’ to ‘supply expansion’ to stabilize housing prices. The government under former President Moon Jae-in introduced a slew of measures and regulations to deter speculative home buying and curb runaway housing prices.

“Excessive regulation has caused low housing inventory,” said Choo. The government will completely revamp the existing housing supply method and boldly realize a paradigm shift in housing policy to supply more houses in the country, he added.

To this end, the government will ease regulations and utilize private development regulations to expand housing supply in urban areas, where idle land is difficult to find.

[Photo by Lee Seung-hwan]

Specifically, the government will designate a group of locations for renewal and renovation to provide 220,000 houses across the nation. This includes 100,000 in Seoul and 40,000 each in Incheon and Gyeonggi Province.

For single homeowners and the elderly, the burden from the excess profit recovery system for house reconstruction will be eased, while standards on safety inspections for reconstruction will be adjusted in more favorable terms.

To secure a stable mid- to long-term supply base, new housing sites for about 150,000 households will be explored in urban areas with high housing demand. A project to revamp outdated areas near subway stations will be applied to existing three new cities such as Changneung in Goyang and Wangsuk in Namyangju, where GTX stops. Great Train Express (GTX) is Korea’s bullet train system under development to reduce commutes from residential suburban areas outside of Seoul to downtown office areas in the capital city.

The government will also provide about 500,000 affordable houses for young adults and newlyweds at prices close to the construction cost.

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