If Jeonse Measures Are Implemented, LH Debt Will Increase by '8.2 Trillion to 10 Trillion Won'

Debt of 91 million KRW per House
Byeon Changheum: "Debt Level is Manageable"

Chang-Hoon Byun, President of Korea Land and Housing Corporation (LH), is responding to lawmakers' questions during the National Assembly Land, Infrastructure and Transport Committee's audit of Korea Land and Housing Corporation held on the morning of the 8th of last month at the National Assembly in Yeouido, Seoul. (Photo by Yonhap News)

[Asia Economy Reporter Moon Jiwon] It is projected that if the government implements the announced Jeonse (long-term lease) measures, the debt of Korea Land and Housing Corporation (LH) will increase by approximately 8.2 trillion to 10 trillion won.

On the 30th, during a current affairs inquiry at the National Assembly Land, Infrastructure and Transport Committee, LH President Byeon Changheum responded to a question from Park Sanghyuk, a member of the Democratic Party of Korea, asking, "How much will LH's debt increase due to the Jeonse measures?" He said, "The debt includes the Housing and Urban Fund and deposits, and reflecting this, we estimate it to be around 8.2 trillion to 10 trillion won."

Earlier, the government announced Jeonse measures to stabilize the Jeonse market by supplying 114,000 public rental housing units by 2022. President Byeon explained that LH is responsible for 79% of this supply, and that approximately 910 million won of debt is generated per housing unit supplied through these measures.

In response to Park's question on whether the increasing debt from the Jeonse measures is manageable, President Byeon replied, "Even if LH constructs the 3rd phase new towns, continuous government capital injections are being made, so the debt ratio itself is decreasing, and considering the proportion it occupies overall, it is at a manageable level."

Regarding concerns that LH might set high sale prices in the 3rd phase new towns to compensate for losses caused by the Jeonse measures, he said, "Since the price ceiling system for sales is in effect, the structure does not allow for additional profits to be included in the sale prices."

The Ministry of Land, Infrastructure and Transport plans to improve the method of calculating the debt ratio as LH's burden could become excessively large due to the Jeonse measures.

Minister Kim Hyunmi of the Ministry of Land, Infrastructure and Transport stated, "LH may receive unfavorable evaluations while carrying out national missions," and added, "We will discuss excluding fund loans and deposits from the debt ratio calculation."

This content was produced with the assistance of AI translation services.