LH offers to buy unsold homes on Seoul-area public land to speed up construction starts
In short
Korea Land and Housing Corporation (LH) said on October 9 it will commit to buying unsold homes built on its public housing sites in the Seoul metropolitan area, for plots where construction starts by the end of next year. It will pay 85% to 92% of the sale price for units of 85 square metres or less, and about 18,000 homes are covered. Applications are open until the end of this year.
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Korea Land and Housing Corporation (LH) said on October 9 that it will commit to buying unsold homes built on apartment plots in its public housing sites in the Seoul metropolitan area, for plots where construction starts by the end of next year. Yonhap and Chosun Ilbo reported that the plots are ones private builders have already bought from LH, and that LH will accept applications until the end of this year. [ 1 , 2 , 3 , 4 ]
The commitments cover land already sold in the Seoul metropolitan area that can be used by the end of next year. Newsis and Seoul Economic Daily put the number of homes directly covered at about 18,000, while Yonhap and Chosun Ilbo reported LH's estimate as up to 18,000 households. [ 1 , 2 , 3 , 4 ]
LH will buy only unsold units of 85 square metres or less of exclusive area that private builders ask it to take. The price will be 85% to 92% of the sale price, depending on the unsold rate, whether construction starts early and the size of the complex. Newsis and Seoul Economic Daily said the range includes incentives of up to 3 percentage points. Starting construction by the first half of next year adds 2 percentage points, and complexes of 500 or more units add 1 percentage point. Newsis and Seoul Economic Daily described the points as added to the purchase price, while Yonhap and Chosun Ilbo described them as points of the sale price. [ 1 , 2 , 3 , 4 ]
LH said it expects the commitments to act as credit enhancement, lowering funding rates and making it easier to move to main project financing (PF), so that construction starts sooner. Chosun Ilbo wrote that the commitments sharply reduce builders' business risk from unsold homes and could speed up private housing supply. "Using LH's purchase commitments is expected to promote private housing starts," an LH official said, adding that LH would do its best to expand housing supply quickly. [ 1 , 2 , 3 , 4 ]
The measure follows the government's August 13 plan for rapid housing supply to stabilise the rental and sales markets. Yonhap reported that the plan raised the purchase price incentive from 1 to 2 percentage points, and that this is the third round of the commitments, after 2024 and 2025. Application rules and other details are posted on the LH website. [ 1 , 2 , 3 , 4 ]
Why it matters
LH said the commitments should work as credit enhancement for builders, lowering their funding rates and making it easier to move to main project financing, so that construction starts sooner. The measure follows the government's August 13 housing supply plan, which aims to stabilise the rental and sales markets.
Key facts
- LH will commit to buying unsold homes on apartment plots in its Seoul metropolitan area public housing sites where construction starts by the end of next year. [ 1 , 2 , 3 , 4 ]
- About 18,000 homes are covered; Yonhap and Chosun Ilbo reported LH's estimate as up to 18,000. [ 1 , 2 , 3 , 4 ]
- Only unsold units of 85 square metres or less of exclusive area, requested by private builders, qualify. [ 1 , 2 , 3 , 4 ]
- The purchase price ranges from 85% to 92% of the sale price, depending on the unsold rate, early construction start and complex size. [ 1 , 2 , 3 , 4 ]
- Starting construction by the first half of next year adds 2 percentage points; complexes of 500 or more units add 1 percentage point. [ 1 , 2 , 3 , 4 ]
- Applications are accepted until the end of this year. [ 2 , 4 ]
- This is the third round of unsold-home purchase commitments, after 2024 and 2025. [ 2 ]
Confirmed by several sources
- LH announced on October 9 that it will provide unsold-home purchase commitments for plots on its Seoul metropolitan area public housing sites where construction starts by the end of next year. [ 1 , 2 , 3 , 4 ]
- Purchase prices will be 85% to 92% of the sale price for units of 85 square metres or less. [ 1 , 2 , 3 , 4 ]
- Incentives are 2 percentage points for a start by the first half of next year and 1 percentage point for complexes of 500 or more units. [ 1 , 2 , 3 , 4 ]
- The measure follows the government's August 13 housing supply plan. [ 2 , 3 , 4 ]
- Details are posted on the LH website. [ 1 , 2 , 3 ]
Still unclear
- Whether the incentive points are added to the purchase price or calculated on the sale price. Newsis and Seoul Economic Daily say the points are added to the purchase price, while Yonhap and Chosun Ilbo describe them as points of the sale price.
- That this is the third round of the scheme, after 2024 and 2025. Only Yonhap reported this.
- That the August 13 plan raised the purchase price incentive from 1 to 2 percentage points. Only Yonhap reported this.