The Korea Land and Housing Corporation (LH) has confirmed that it has temporarily lowered the conditions for selling unsold land it owns in new towns in the metropolitan area by significantly discounting the earnest money for sales. Just a month after this measure was implemented, 80% of the relevant land has been sold. LH plans to utilize this for expanding newly constructed dwellings.
According to LH and the Korea Housing Association on the 16th, LH informed mid-sized construction companies and other businesses last month about the 'new construction purchase agreement project using LH-owned land.' The plan is to sell unsold land within the new towns in the metropolitan area by significantly relaxing the requirements for earnest money until June. LH will give preferential purchase rights for the land to buyers based on certain conditions before signing the land sale contract.
A representative from LH noted, 'This is the first time that we have reduced the earnest money and purchase conditions to sell unsold land.' They added, 'The intention is to expand newly constructed dwellings using long-term unsold land.'
The relaxation of the earnest money requirements includes three aspects: ▲ reduction of earnest money, ▲ extension of the earnest money period, and ▲ relaxation of the conditions for earnest money retention.
LH has decided to drastically cut the earnest money from 3% to 5% of the land price to 1%. The earnest money period, which was initially limited to within one month from the date of earnest money reservation, has now been extended to 30 days after the signing of the purchase agreement. Additionally, if earnest money is paid and a sales contract is not concluded later, it was initially stipulated that the earnest money would be retained by LH, but this condition has been relaxed; in cases of withdrawal due to review rejection, termination of the agreement, and other reasons, the money will be refunded. Considering the recent liquidity deterioration in the construction industry, LH has also extended the land acquisition period from within three months after the agreement to one year.
Just over a month after implementing this project, LH has received applications for earnest money reservations for 80% (based on area) of the target unsold land. The targeted plots of land are 27 parcels of unsold land in new towns in the metropolitan area, totaling 124,852 square meters. Among them, 17 parcels, or 100,393 square meters, have been sold out. It was confirmed that registration has been largely completed except for small parcels in the Unjeong new town in Paju. LH has projected that this project can supply up to 6,000 newly constructed dwellings.
Meanwhile, LH announced on the 9th that it plans to purchase more than 50,000 newly constructed dwellings this year. This is in line with the government's announcement in August of last year that it would acquire more than 100,000 newly constructed dwellings by this year.