The Korea Housing Association, the Korea Housing Builders Association, and the Korea Developer Association said on the 13th they welcomed the government's plan to expedite the supply of dwellings. They said easing regulations on financing for private housing projects and on redevelopment projects is expected to help speed up the supply of dwellings.
The three associations said the plan "accurately diagnoses the current housing market and, by recognizing the role of the private institutional sector for market stability, creates conditions to expand the rapid supply of dwellings," adding, "We will actively cooperate with government policy and make every effort to stably supply the dwellings people want."
The associations gave positive marks to improvements in regulations and financial support related to maintenance projects such as redevelopment and reconstruction. The associations said, "Conditions have been created to facilitate the supply of dwellings in urban areas."
In this plan, the government extended by one year, to 2027, the special measure on limits for project financing (PF) loan guarantees, and decided to raise the acquisition price for rental dwellings in maintenance projects to the level of the standard construction cost. Mortgage loans for actual residents and end users, such as relocation loans, will be managed separately from financial institutions' household loans total volume management targets. Along with this, the government simplified the material bidding procedures in the contractor selection process and expanded payment of bid bonds to allow submission of guarantees as well as cash.
The associations also expressed expectations for measures to improve financing conditions for private housing projects. The government views funding support related to the supply of dwellings as "productive finance" and will temporarily suspend regulation of the equity ratio at residential project sites. It will raise the PF guarantee supply target and expand the scope of guarantee fee reductions. The associations welcomed these steps, saying they "could increase the driving force for private housing projects."
In particular, they gave positive marks to plans to boost the supply of non-apartment housing such as multi-household and multi-family dwellings. The government will expand the building area limit for multi-household and multi-family dwellings to 1,000 square meters and ease regulations on the area of community facilities when calculating floor area ratio. It will raise limits on construction financing support and lower interest rates.
The associations said, "By pursuing construction regulation improvements alongside financial support, it will be possible to make a practical contribution to revitalizing the supply of non-apartment housing that serves as a housing ladder for low- and middle-income residents."
At the same time, the three associations stressed that follow-up legislation and swift implementation are crucial to improve the effectiveness of the plan. They said eight dwelling supply-related bills, including the Housing Act and the Act on the Improvement of Urban Areas and Residential Environments that are awaiting a plenary vote at the National Assembly, should be passed quickly.
The association said, "For expectations of housing market stability under this plan to translate into real effects, rapid policy implementation, including revisions to relevant statutes, is necessary," adding, "A working-level body should be set up to regularly review policy implementation so policies can proceed smoothly." The association also suggested, "Please prepare additional measures to resolve unsold dwellings in provincial areas, which were not included in this plan."