Housing Finance Research Institute "Public Guarantee Products Should Be Developed to Utilize Shared Equity Housing"

Mentioning the Need to Develop Public Guarantee Financial Products from a New Perspective

[Asia Economy Reporter Park Sun-mi] As part of expanding the public's housing choice options, opinions have been raised on the need to review the potential utilization and activation measures of shared equity housing.

On the 27th, the Housing Finance Research Institute under the Korea Housing Finance Corporation argued in a report that ‘the introduction and activation of shared equity housing’ is necessary to create a housing purchase environment and expand the diversity of housing occupancy types.

The awareness among general households that they must own a home has been steadily increasing. According to survey results, the percentage of general households responding that ‘they must own a home’ was 82.8% in 2017, 82.5% in 2018, and 84.1% in 2019, exceeding 80% over the past three years. It was also found that young adults (63.2%) and newlyweds (75.1%) prefer housing support policies that expand home purchase and jeonse loan options.

Since the proportion of households wishing to purchase a home early in household formation is increasing, it is argued that various support policies should be prepared to realize the introduction and activation of ‘shared equity housing.’

Shared equity housing refers to an intermediate occupancy type between public rental and owner-occupancy. It has the advantage of being used as a mixed housing occupancy form and a community-integrated urban development tool during the redevelopment of underdeveloped areas. It also provides greater residential stability and continuity compared to traditional homeownership.

The Housing Finance Research Institute explained, "For the successful introduction of shared equity housing, flexibility should be secured by selecting the target as ‘first-time home purchase households’ rather than limiting it to youth households, newlyweds, or by age and income," and added, "It is also necessary to consider methods applicable to purchasing existing homes in addition to new sales." Furthermore, they added, "To activate shared equity housing, it is necessary to develop new types of publicly guaranteed financial products."

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