Choi In-ho, president of Korea Housing & Urban Guarantee Corporation (HUG), said he would strengthen guarantee support for corporate restructuring (CR) REITs to ease the glut of unsold homes in provincial areas.
According to HUG on the 3rd, Choi visited the Korea Housing Association on the 2nd, heard about housing developers' difficulties stemming from rising construction costs and a contraction in the project financing (PF) market, and discussed pressing issues for the housing industry, including revitalizing PF and redevelopment projects and resolving unsold inventory.
Choi said he plans to bolster support for CR REITs that purchase unsold dwellings with HUG guarantees and lease them out, to help housing developers struggling with unsold units in the provinces. He said guarantees for CR REITs will be processed quickly in line with financial institutions' loan schedules, and that guarantees will also be actively provided for additional purchased dwellings.
Meanwhile, HUG designated three areas—in Jung District, Incheon, and the cities of Icheon and Yangju in Gyeonggi Province—as unsold inventory management zones in April. A city, county, or district is designated if it has 1,000 or more unsold units, unsold units accounting for 2% or more of its multifamily housing stock, and meets at least one of the conditions of "increase in unsold units," "sluggish resolution of unsold units," or "concern over unsold units."
As of April, there are 5,652 unsold dwellings in the unsold inventory management zones. That is about 8.5% of the nationwide total of 66,208 unsold units.