"Supply of 2.5 Million Houses Despite Housing Market Slowdown"…3rd Housing Supply Innovation Committee

"Domestic Housing Supply Rate Falls Short of Advanced Countries"
"Support Through Simplified Procedures and Tax Benefits"

Minister of Land, Infrastructure and Transport Won Hee-ryong attending the 3rd Housing Supply Innovation Committee meeting

Despite some contraction in the housing market due to interest rate hikes and population decline, the government announced on the 24th that it will accelerate the supply of 2.5 million housing units over the next five years.

The Ministry of Land, Infrastructure and Transport held the 3rd meeting of the 'Housing Supply Innovation Committee (Innovation Committee)' at 10 a.m. that day to review the housing supply conditions and outlook, and to check the key tasks of the '2.5 million+α Housing Supply Plan.'

At the meeting, the committee diagnosed the housing supply outlook for the next five years based on current housing supply conditions, and discussed whether steady housing supply is necessary under the current government despite the recent housing market slowdown.

The committee members commonly assessed that the domestic housing coverage rate does not reach the level of advanced countries. Considering housing demolitions and the increase in 1-2 person households, housing demand is expected to continuously increase, so sufficient housing stock must be secured to meet the rising demand. To this end, they expressed the opinion that new supply of more than 2.5 million units (based on permits and approvals) over the next five years is necessary.

If the recent trend of interest rate hikes and housing market slowdown continues, private housing projects are expected to shrink, resulting in new construction supply over the next five years decreasing by more than 10% compared to previous years.

Furthermore, while supply policies have so far focused on public-led development of new towns on the outskirts of cities, private projects responsible for urban housing supply such as redevelopment projects have not been actively promoted due to regulations, raising concerns about disruptions in urban housing supply preferred by the public.

In response, the committee emphasized, "Considering the long lead time for housing supply, an environment should be created where the private sector can continue to supply housing even during economic downturns, ensuring steady supply of urban housing desired by the public."

They also agreed that the housing supply plan should include various measures to support private projects, such as procedural simplification, deregulation, and tax benefits.

The third meeting of the Housing Supply Innovation Committee is currently in progress.

In-depth discussions were also held on the core housing supply tasks reflecting the contents proposed by the Innovation Committee so far.

First, to revitalize private supply, the establishment of private urban complex projects applying various special measures such as urban and architectural regulation relaxations and procedural simplifications previously provided only to the public was discussed.

Regarding urban and station area supply, the creation of a compact city inducing high-density development by relaxing floor area ratios and building regulations around GTX station areas when planning public land was discussed.

To accelerate project speed, the introduction of integrated reviews that handle various assessments and evaluations related to urban planning, architecture, transportation, disaster, education, and environment at once for the entire housing project is being considered.

Measures to improve housing quality such as reducing noise between floors and expanding variable housing, as well as establishing high-quality education, environment, and cultural infrastructure in new towns that meet public expectations, and detailed promotion plans for youth housing support including youth cost-price housing and first-home projects near stations regarding business models, supply methods, targets, and prices were also discussed.

Won Hee-ryong, Minister of Land, Infrastructure and Transport, said, "The core tasks presented today are significant as practical tasks that concretize the activation of private supply and deregulation emphasized by the Innovation Committee so far," adding, "Based on the core tasks discussed today, we will do our best to present a tangible ‘2.5 million+α Housing Supply Plan’ to the public in the second week of August as promised."

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