Housing, real estate industry welcomes Aug. 13 measures as step toward supply expansion

The Korea Housing Association and other housing and real estate industry groups welcomed the government's Aug. 13 measures, saying the package "has created conditions for rapidly expanding housing supply while recognizing the role of the private sector in stabilizing the market."

Industry groups on Thursday praised the government's recognition of housing supply financing as "productive finance." They said measures to temporarily ease equity ratio regulations on residential development sites — aimed at encouraging private-sector financing for housing supply — along with plans to raise project financing guarantee supply targets, expand reductions in guarantee fees, and broaden exemptions for mortgage lending to housing sales and rental businesses would improve conditions for securing construction funding.

The industry also said several specific measures in the package would help facilitate housing supply in urban areas: extending the special exception on project financing loan guarantee limits by one year through 2027, raising the acquisition price for rental housing to the level of standard construction costs, and separately managing mortgage loans for actual end-users — including relocation loans — outside financial institutions' aggregate lending targets.

Measures to improve supply conditions for non-apartment housing — including multi-unit and multi-family homes — also drew positive assessments. Industry groups said combining regulatory improvements with financial support could help boost supply. Such steps include expanding the building footprint limit to 1,000 square meters, easing the floor area ratio calculation for communal resident facilities, raising construction financing limits and cutting interest rates.

The groups also called incentives for housing supply essential measures for expanding supply. Those incentives include a phased easing of in-kind contribution ratios for housing construction projects that receive early permits, a temporary reduction in development charges for residential projects, and a relaxation of the non-residential ratio requirement for mixed-use apartment complexes.

However, the industry urged the government to act quickly, saying "the swift passage of housing supply-related bills currently awaiting a National Assembly floor vote — including eight pieces of legislation such as the Housing Act and the Urban and Residential Environment Improvement Act — is urgently needed." The groups added that "speedy policy implementation, including amendments to relevant laws and regulations, is necessary for the market stabilization expected from this package to translate into real results."

The groups also called on the government to establish a working-level body to regularly monitor policy implementation and ensure the measures announced Thursday are carried out smoothly, and to separately develop plans to address unsold units in regional housing markets.