The financial authorities are making an all-out effort to draw up measures to increase the supply of dwellings in the greater Seoul area. The move follows an instruction at a closed-door meeting on real estate and stock market conditions at the presidential office on the 3rd to secure as much housing supply as possible.
According to the financial authorities on the 6th, the Financial Services Commission is in the final stages of work on supply measures to report at the second real estate supply review meeting to be held on the 7th. The Ministry of Land, Infrastructure and Transport and the authorities held a meeting on the 4th to hear the construction industry's suggestions and requests regarding the supply of dwellings in the greater Seoul area.
At the time, participants are said to have spread out a map of the greater Seoul area and discussed in detail land parcels and volumes capable of supplying 50,000 or more dwellings. An official at the authorities said, "After the recent real estate meeting, there was an instruction to 'come up with supply measures within two to three days,' and Financial Supervisory Service Governor Lee Chan-jin even canceled this week's vacation."
The authorities are considering measures to revitalize the real estate project financing (PF) market. To increase the supply of dwellings, PF funds need to circulate smoothly. Financial institutions have been reluctant to lend due to PF insolvencies that have piled up in recent years.
The construction industry has reportedly requested an expansion of public guarantees to grow the PF market. If the Korea Housing Finance Corporation and the Korea Housing & Urban Guarantee Corporation (HUG) expand PF guarantees, financial institutions can reduce loss burdens and increase the supply of funds.
In secondary financial institutions such as mutual finance institutions and savings banks, which handle bridge loans (Bridge Loan, loans to fill temporary funding gaps before principal investment is secured), there were requests to delay the implementation of the PF capital regulation scheduled for next year and to ease the burden of risk weights related to PF. Secondary financial institutions currently have many insolvent PFs, making additional supply difficult.
The dwelling supply measures are expected to be announced as early as next week, and by this month at the latest. An official at the authorities said, "Unlike previous measures, there was an instruction to include ways to supply quickly, so we are reviewing a variety of options."