SEOUL, Sept. 26 (Korea Bizwire) – South Korea will supply 120,000 public homes in addition to the existing plan to deliver 2.7 million new homes by 2027 to offset the declining private-sector home supply amid higher lending rates, the land ministry said Tuesday.
In August last year, the government announced the public home supply plan for the 2023-27 period by easing regulations for redevelopment and reconstruction, and allowing the private sector to join downtown development projects.
“The 2.7 million home plan is expected to help ease the lack of homes in preferred residential areas in the mid and long term. But the market conditions for new homes (in the private sector) began to deteriorate in the second half of last year,” the Ministry of Land, Infrastructure and Transport said in a statement.
To offset the lack of homes in the private sector, the government will provide 120,000 public homes, including 30,000 in large residential towns near the capital city of Seoul and 85,000 in newly developed areas, it said.
“The 30,000 homes are likely to be delivered as soon as next year depending on construction permits, and the remainder is expected to be supplied by 2027,” a ministry official said over the phone.
Under the 2.7 million home project, the government plans to provide 1.58 million homes in Seoul and metropolitan areas, and 1.12 million houses in other provinces from 2023-27 to stabilize the real estate market.
The government plans to supply 500,000 homes in Seoul — home to 9.5 million of the country’s 52 million people — during the period, up 56 percent from 320,000 homes provided in the past five years.
This year, the government aims to provide 470,000 public homes and will increase the number to more than 1 million next year.
Home prices soared over the past several years despite packages of measures, such as tax hikes and tighter lending rules, intended to rein in prices.