Supplementary Budget Offers Lifeline to Builders... MOLIT to Provide 1 Trillion Won in Rapid Support via PF and Safe Buyback Programs

The government’s special guarantee and buyback programs, launched in September to support struggling small and medium-sized construction companies, have seen a surge in applications from the industry. To date, applications totaling over 800 billion won have been received, and liquidity support exceeding 1 trillion won is expected to be provided by the end of the year. On November 12, the Ministry of Land, Infrastructure and Transport announced, “The special project financing (PF) guarantee for small and medium-sized construction firms and the unsold housing buyback program, introduced through the second supplementary budget in July and the ‘Regional Construction Investment Enhancement Plan’ in August, have been receiving a strong response from the industry.” PF Special Guarantee: Support Provided if Project Feasibility Is Strong, Even for Lower-Ranked Firms The PF special guarantee is a program that opens up funding channels even for small and medium-sized construction companies with r

Policy

11.12 11:00

"Housing Fund Should Focus on Supporting Supply, Not Demand" [Real Estate AtoZ]

Experts point out that the Housing and Urban Fund should provide more proactive support to (housing) suppliers. For years, the government has focused on supporting loans rather than supplying homes, under the pretext of 'helping stabilize housing for low-income, non-homeowners.' As a result, it has become clear that an excessive influx of funds into the housing and real estate markets has exacerbated housing instability. They argue that the focus should shift toward encouraging organizations such as Korea Land & Housing Corporation (LH) and local public enterprises involved in housing projects under local governments to take a more active role. According to the Ministry of Land, Infrastructure and Transport, as of 2006, more than 11.7 trillion won?44% of the total 26 trillion won raised?was used for loans and investments for housing project developers. This proportion steadily declined, reaching 31% in 2016, the first year after the Housing and Urban Fund was relaunched. Last year, les

Policy

11.12 07:00

How Did the Housing and Urban Fund Inject Money into the Market [Real Estate AtoZ]

"This inevitably causes hardship for ordinary people, but it was a point where we had to break the cycle at least once. In the past, we increased lending under the pretext of stabilizing housing for the working class, but we have now reached a structural limit where we can no longer continue." Bank of Korea Governor Rhee Changyong made these remarks last month during the National Assembly audit of the central bank, referring to South Korea's Jeonse system and Jeonse loans. He noted that as Jeonse loans increased, the household debt ratio also rose rapidly, and the real estate market was no longer in a normal state. What impact have Jeonse loans had on the nation’s housing market? Interest Subsidies: The Secret Behind Supplying Dozens of Times More LiquidityUnlike typical secured loans, Jeonse loans do not have tangible collateral. Instead, a guarantee certificate issued by a public institution serves as collateral. The Housing and Urban Guarantee Corporation (HUG), Korea Housing Finan

Policy

11.12 07:00

The "Support" Became the Kindling for Soaring Housing Prices

If you have ever made contributions to a housing subscription savings account, you also hold a “stake” in the Housing and Urban Fund. The same applies if you have purchased a house, land, or any type of real estate, or if you have taken out a loan using such property as collateral. When transferring ownership or establishing a mortgage, you are required to purchase National Housing Bonds, which are also a major funding source for the Housing and Urban Fund. Even a portion of the revenue from the lottery is directed to this fund. The Housing and Urban Fund is essentially “money borrowed from the public.” The annual scale of funds raised and managed in this way amounts to 120 trillion won. Including liabilities, the total asset size reaches 225 trillion won. This makes it the third largest fund in Korea, following the Public Capital Management Fund and the National Pension Fund. Among project-based funds with specific purposes, it is the largest. In the 1970s and 1980s, these funds were

Policy

11.11 12:00

Over 200 Trillion Won in Fund Management, with No Checks or Oversight [Real Estate AtoZ]

The National Assembly has consistently raised questions about the appropriateness of the "Housing and Urban Fund Interest Subsidy Program," which has recently been cited as a factor behind the sharp surge in housing prices. From 2022 through this year, for four consecutive years, it has demanded corrective action. However, rather than implementing reforms, the Ministry of Land, Infrastructure and Transport has focused on expanding the related budget. Next year, the size of this budget will reach an all-time high. The government has played a leading role in supplying excessive liquidity to the housing market, and is now introducing a slew of regulations, citing a sharp rise in home prices. Despite repeated warnings over the past several years that the rapid increase in household debt is placing a burden on the national economy, the message of "take out a loan to buy a home" has persisted, following the earlier "take out a loan to buy a house" policy. Policy inconsistencies are apparent,

Policy

11.11 07:10

The Third Largest Fund in Korea, Built on Citizens' Money: What Is the Housing and Urban Fund?

The National Housing Fund Account, established at the Housing Bank in 1973, serves as the foundation for the current fund. It was officially launched as the National Housing Fund in 1981, and later relaunched in 2015 as the Housing and Urban Fund to be used as a resource for urban regeneration. As of the 2024 financial settlement, the total assets, including debt, amount to 228 trillion won. The annual formation and management scale is around 120 trillion won. It is the third largest fund in Korea, following the Public Capital Management Fund and the National Pension Fund. Among project-based funds with a specific purpose, such as promoting housing welfare, it is the largest. The resources for the fund are drawn from sources such as the subscription savings payments made by ordinary citizens, National Housing Bonds, and lottery funds. National Housing Bonds must be purchased when acquiring certain types of real estate. They are also mandatory when taking out a loan secured by real esta

Policy

11.11 07:00

[Exclusive] Government-Supported Jeonse Loan Balance Surpasses 70 Trillion Won... Fueling Housing Price Surge [Real Estate AtoZ]

With the government taking the lead in directly and indirectly increasing jeonse loans, the outstanding balance of jeonse loans using policy funds surpassed 70 trillion won as of last year. This figure exceeds one-third of the total outstanding loans at all domestic financial institutions. The balance has doubled compared to 2020, increasing by several trillion won each year. There are criticisms that the government, by expanding jeonse loans over the past three to four years, has provided the grounds for the recent surge in housing prices. According to an analysis by The Asia Business Daily on November 11 of the Ministry of Land, Infrastructure and Transport’s Housing Affairs Manual, the National Assembly Budget Office’s budget analysis report for next year, and the annual audit report of the Korea Housing & Urban Guarantee Corporation, the total outstanding balance of the Bogeumjari Loan (jeonse loan) stood at 76.0766 trillion won at the end of last year. This figure includes both th

Policy

11.11 07:00

[The Editors' Verdict] Will Raising the Holding Tax Really Control Gangnam Property Prices?

Let's assume you own one home each in Songpa and Mapo in Seoul, and in Gyeonggi Province. Next year, the property holding tax (comprising the property tax and the comprehensive real estate tax) will be raised to 1%. (Deputy Prime Minister and Minister of Economy and Finance Koo Yuncheol stated, "If the holding tax is set at 1%, and if your home is worth 5 billion won, paying 50 million won a year would be unsustainable.") Given this, you decide to sell one of your properties. Which one should you sell first? And what should you do with the proceeds? Many people would likely start by selling their lower-tier properties. The cash they secure would probably be poured into purchasing a top-tier apartment. After all, isn't owning a "smart single property" important to everyone? While the government has imposed restrictions on loans and transactions, it cannot block transactions for actual residence. Despite the October 15 measures, which layered regulations across all of Seoul and major are

Policy

11.06 07:58

Sixteen Ministries' Ministers and Vice-Ministers to Meet Biweekly to Coordinate Housing Supply Measures... Consultative Body Launched

Supplementary Budget Offers Lifeline to Builders... MOLIT to Provide 1 Trillion Won in Rapid Support via PF and Safe Buyback Programs

"Housing Fund Should Focus on Supporting Supply, Not Demand" [Real Estate AtoZ]

How Did the Housing and Urban Fund Inject Money into the Market [Real Estate AtoZ]

The "Support" Became the Kindling for Soaring Housing Prices

Over 200 Trillion Won in Fund Management, with No Checks or Oversight [Real Estate AtoZ]

The Third Largest Fund in Korea, Built on Citizens' Money: What Is the Housing and Urban Fund?

[Exclusive] Government-Supported Jeonse Loan Balance Surpasses 70 Trillion Won... Fueling Housing Price Surge [Real Estate AtoZ]

[The Editors' Verdict] Will Raising the Holding Tax Really Control Gangnam Property Prices?

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