Next year, the supply of public housing for stabilizing housing prices is expected to significantly increase. With the budget allocated to public rental housing rising by more than 7 trillion won compared to this year, rental housing is likely to be the focus of the upcoming supply measures rather than public sales. In particular, public rental housing is expected to be offered in a demand-oriented manner, expanding from the Korea Land & Housing Corporation (LH) to private companies, targeting newlyweds, youth, and the elderly.
The government, while strengthening housing welfare through public rental housing, plans to reduce the role of policy financing for 'homeownership'. The budget allocated for next year's Ditto and Support loans is expected to be nearly 4 trillion won less than this year, raising the threshold for working-class individuals to purchase dwellings through policy loans.
According to the Ministry of Land, Infrastructure and Transport's '2026 housing & urban fund operation plan' released on the 29th, the scale of operation for next year's housing & urban fund is set at 108.0512 trillion won. This represents an increase of 4.5% (4.6597 trillion won) compared to this year. The total expenditure also rose to 38.1497 trillion won, an increase of 7.8% (2.7542 trillion won) from this year.
In this operation plan, the budget for public rental housing has significantly increased. The government has set the budget for public rental housing next year at 22.7858 trillion won, an increase of 7.3586 trillion won from this year. The loans for rental housing are at 14.4584 trillion won, showing a 15.9% increase in the budget compared to the previous year, and the investment in rental housing stands at 8.3274 trillion won, which is an increase of 182.4% from the previous year.
An HUG official noted, 'It seems that the part of lending construction funds from the fund for building rental housing and the part of investment in rental housing that the Korea Land & Housing Corporation (LH) directly constructs have been reflected.'
In particular, public rental housing is expected to expand not only in quantities directly built by LH but also in the form of publicly supported private rental housing. As there are limitations on the volume of public rental housing built by LH, it is expected that private entities will build rental housing and offer it at prices lower than the market rate. These rental houses are expected to be developed to meet the diverse demands of youth, newlyweds, and the elderly.
Currently, it is reported that the Ministry of Land will finalize detailed plans for expanding public rental housing and include these in the real estate measures to be announced soon.
The government plans to supply 194,000 units of public housing next year. The Presidential Committee on Policy Planning has previously set a goal to increase the long-term public rental housing ratio from the existing 8% to 10% by 2030 through this government's five-year plan.
The form of public housing, where the government directly builds and sells dwellings, is expected to decrease somewhat. According to the housing & urban fund operation plan, the budget allocated for next year's sales dwellings has decreased by more than 1 trillion won.
In particular, it seems that 'homeownership' through policy loans will become more difficult. The budget for policy loans intended for the working class, such as Ditto and Support loans, is set at 10.3016 trillion won, which is a decrease of 3.7556 trillion won (26.7%) from this year. The Ditto loan is a policy mortgage product offered at a low rate for working-class individuals without housing. The Support loan is a policy rental loan.