The South Korean government is easing building regulations to allow for larger and taller non-apartment housing, including multi-family and multi-unit dwellings, while expanding construction financing support.
On August 13, the Ministry of Land, Infrastructure and Transport announced a plan for rapid housing supply aimed at stabilizing the rental and sales markets. The government will relax regulations on building area and height for multi-family and multi-unit housing, while also addressing sunlight-related regulations. This initiative aims to reduce the financial burden on supply developers and support actual buyers, including young people, in purchasing non-apartment housing.
The most significant change involves the relaxation of building area and height regulations. The building area limit for multi-family and multi-unit housing will increase from the current 660 square meters to under 1000 square meters. This change allows for more efficient land use by enabling developers to construct single buildings rather than multiple smaller ones. Industry stakeholders have previously criticized the existing regulations for making it difficult to create efficient housing layouts and for requiring unnecessary neighborhood facilities.
Height restrictions for multi-unit housing will also be eased from three stories to four. This change allows for an additional floor on the same plot of land, which the government estimates could increase the number of units by approximately 33% within the same area. Additionally, when constructing urban-type multi-family housing, there are plans to allow for a height increase from five to six stories, subject to review by the building committee.
Sunlight regulations will also be relaxed. Previously, non-apartment buildings had to be constructed at an angle for the upper floors, which reduced usable space. The existing rule required that if a building exceeded 10 meters in height, it had to be set back from the property line by half its height. The new guidelines will allow for a setback of only 5 meters for buildings between 10 and 17 meters tall. A proposed amendment to the building law will also permit vertical construction, including piloti, and is expected to be implemented by the end of the year after the establishment of subordinate regulations.
The financial burden on supply developers will also be reduced. The limit for construction financing will increase from 70 million won to 90 million won, and the interest rate will decrease from 3.5% to 3.2%. Loans for new construction and demolition purposes will now allow a loan-to-value ratio of up to 60%, up from the previous 0%.
Kim Deok-rye, a senior researcher at the Korea Housing Industry Institute, commented on the expansion of building area, stating, "This will help expand living spaces." However, he noted that the height regulations should be further relaxed to 6 or 7 stories to consider economic viability and demand.
Nam Hyuk-woo, a researcher at Woori Bank, described the new measures as a comprehensive support plan aimed at revitalizing the non-apartment market, which has been sluggish since the recent rental fraud incidents. He cautioned, however, that if support is concentrated on new housing, rising material and labor costs could lead to higher sale prices and rents, limiting actual demand.
Nam also emphasized that existing multi-family and multi-unit housing still face transaction restrictions due to loan regulations, suggesting that easing regulations on existing non-apartment properties is necessary to broaden options for actual buyers and increase the availability of properties in the market.
* This article has been translated by AI.
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