As the government recently accelerated the decline in house prices and fears of a hard landing in the real estate market are growing, a 5 trillion won worth of unsold housing project financing (PF) loan guarantees are newly established to prevent a financial crunch for construction companies.
In addition, the obligation to pre-subscribe for public housing sites will be abolished, and measures to improve the safety diagnosis of reconstruction and normalization of housing registration and rental business will be prepared and promoted within the year.
The Ministry of Land, Infrastructure and Transport announced at the real estate-related ministerial meeting held today (10th) that it would implement a plan to normalize the real estate market.
As the number of unsold apartments has increased due to the recent slump in the subscription market, the Ministry of Land, Infrastructure and Transport decided to create a new PF loan guarantee product for unsold homes worth KRW 5 trillion through the Housing and Urban Guarantee Corporation (HUG).
Currently, when unsold units occur, construction companies face difficulties such as stopping construction due to lack of liquidity.
In the future, HUG will provide guarantees so that PF loans can be obtained for unsold business sites before completion.
However, the guarantee is provided only if there is a self-rescue effort by the construction company to resolve the unsold pre-sale, such as a sale price discount.
The Ministry of Land, Infrastructure and Transport plans to change the operation plan for the National Housing Fund in February next year and prepare specific implementation plans such as guarantee limits and rates after consultation with related organizations.
In addition, in order to prevent excessive contraction of the housing supply base due to unsold housing units, the issuance of existing PF loan guarantees by HUG and the Housing Finance Corporation (HF) will be expanded to KRW 10 trillion and the interest rate and examination requirements will be reasonably relaxed.
Real estate has been recognized only when REITs own more than 50% of the stake in a real estate corporation.
In addition, the government has decided to release the reconstruction safety diagnosis standard, which was scheduled to be announced within this year, in early December.
It is planned to include measures to reduce the structural safety ratio from 50% to 30-40%, and to restrictly implement the public institution adequacy inspection, which is currently mandatory when classifying D in the precise safety diagnosis, only when the local government requests it. .
We plan to announce the improvement plan early next month and implement it as early as January next year.
We will also prepare a plan to normalize the housing registration and rental business within this year.
The current registered rental business system allows long-term (10-year) registered rental business only for single-family and row houses, excluding apartments, as benefits have been reduced after 2020.
Accordingly, the government has decided to come up with a rational reorganization plan within this year in consideration of conditions such as the sales and rental market conditions.
The improvement plan includes taxation such as comprehensive real estate tax, capital gains tax and corporate tax, the level of financial support, and measures to foster professional corporate entrepreneurs such as REITs, which will be announced in December.
Due to the recent slump in the subscription market, the obligation to pre-subscribe for public housing sites to be sold in the future will be abolished in order to disperse the pre-sale volume.
Currently, for the early supply of housing, it is mandatory to apply for public housing sites in advance, so there was a problem that sales were concentrated within two to three years while demand had decreased.
The government also decided to relax the pre-application period from six months to two years for housing sites that have already been sold.
Accordingly, the private supply will be adjusted from 74,000 to 15,000 by 2024, and the public supply supplied by LH will also be reduced from 24,000 to 11,000 by next year.
The non-priority subscription expands the number of applicants by abolishing the residential area requirement, which is currently limited to non-homeless people residing in the relevant city/gun, and also increases the range of preliminary winners from 40% or more to 500% or more of the number of currently recruited households.
Hyuk-jin Kwon, head of the Ministry of Land, Infrastructure and Transport, said, "We will implement major tasks as quickly as possible to prevent a contraction in the housing supply base and protect the common people and end-users."