Korea Contractors Association welcomes Aug. 13 housing supply measures

The Korea Contractors Association on Friday welcomed the government's "rapid housing supply plan" and "comprehensive financial measures for real estate market stabilization," both announced Thursday.

The association said the Aug. 13 measures constitute "effective steps to ease the financing burden on the construction industry and improve conditions for private housing supply." It added that many proposals it had previously submitted to the government were reflected in the package — including a deferral of the project financing equity ratio increase, deregulation of relocation loan rules and an expansion of mortgage loan exemptions for housing developers. The group said these changes "will go a long way toward resolving bottlenecks in construction supply."

On the decision to defer the project financing equity ratio increase for residential project sites to 2029 and expand PF guarantee supply targets, the association said the moves "will be a great help in securing financing for viable project sites struggling due to tightening in financial markets."

It also viewed positively the expansion of special PF guarantees for small and midsize construction companies, the scale-up of construction cost-plus PF guarantees, the extension of fee reduction periods and additional discounts for early ground-breaking — measures it said would ease the financial burden on private housing projects and encourage faster construction starts.

On relocation loans, the association said improving the collateral valuation method — previously centered on the assessed value of existing assets — and introducing a new relocation loan guarantee product through the Korea Housing Finance Corporation would ease the financial burden on union members, support smooth relocation and ground-breaking, and significantly improve conditions for redevelopment projects.

The association also said "follow-up regulatory reforms and guarantee product overhauls must be implemented promptly for housing ground-breakings and supply expansion to be felt on the ground," adding that "the construction industry will actively cooperate with government policy and work to build housing quickly, contributing to housing stability for ordinary citizens."

Meanwhile, the Korea Contractors Association last month hosted a roundtable with executives from the top 10 construction companies by construction capacity rating to discuss ways to overcome the crisis facing the industry.