The government is working on follow-up housing supply measures, focusing on urban idle land and non-apartment housing such as villas and officetels. The plan aims to secure land that can be supplied relatively quickly in urban areas and to restart halted non-apartment construction projects.
According to the Ministry of Land, Infrastructure and Transport and industry sources, a housing supply plan, following a tax reform proposal, is expected to be announced as early as mid-August. This plan will discuss the residential conversion of semi-industrial areas and non-residential land, the development of public facility relocation sites, and the mixed-use development of aging public buildings.
Urban idle land has the advantage of lower land acquisition burdens and the ability to utilize existing transportation and living infrastructure. However, changes in land use, public contributions, infrastructure burdens such as schools and roads, and local government and resident opposition can slow down project timelines. Past examples, such as the Taereung Golf Course and the Yongsan area, have seen government-announced supply sites delayed due to traffic and environmental issues.
The key is to not only announce supply plans but also to translate them into actual construction starts. The Ministry reported that from January to May this year, nationwide housing permits totaled 98,694 units, a 10.6% decrease from the same period last year. Construction starts increased by 27.0% to 94,367 units, but in Seoul, where demand is concentrated, the number fell by 10.7% to 9,630 units.
Previously, the government announced plans to start construction on 1.35 million units in the metropolitan area by 2030 and to supply 60,000 units using urban idle land and aging public buildings. However, many of these projects are scheduled to begin after 2027, raising concerns about immediate supply shortages.
There are calls for local governments to be more actively involved in housing supply by providing financial incentives. This approach would shift from the central government merely designating land to a model where local governments address permitting and infrastructure issues, potentially expanding support from housing and urban funds or transportation facilities.
Lee Eun-hyung, a researcher at the Korea Construction Policy Institute, pointed out that the available urban idle land is limited, making it difficult to sustain housing supply based solely on this resource over the long term.
Normalizing non-apartment housing supply is seen as a more immediate solution compared to urban idle land. Villas, urban-type housing, and officetels typically have shorter project timelines and have absorbed rental demand from young couples and single-person households. However, following recent rental fraud cases, tenant preferences have declined, and rising construction costs, project financing issues, and stricter guarantee requirements have weakened the supply base.
Shin Bo-yeon, a professor at Sejong University’s Department of Real Estate AI Convergence, noted that villas are challenging assets for short-term investment unless redevelopment opportunities arise. Many are operated for rental income by retirees, suggesting that tax incentives should be provided to align supply and demand.
To effectively increase supply, comprehensive policy changes regarding housing unit calculations and actual residency regulations are necessary. Even if funding is provided to support housing construction, the lack of demand from buyers to rent out units could hinder project viability.
Seo Jin-hyung, a professor at Kwangwoon University’s Department of Real Estate Law, stated that even if green belts are lifted, it would take 7 to 8 years to see actual housing supply. Therefore, simply announcing supply measures while maintaining residency obligations and the one-household, one-home policy will not realistically increase supply. He added that policy changes, such as excluding certain non-apartment units from housing unit calculations, are needed to stimulate both sales and rental demand.
* This article has been translated by AI.
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