LH to Implement Additional Purchase Guarantees for Unsold Homes in Public Housing Areas

The Korea Land and Housing Corporation (LH) will implement additional purchase guarantees for unsold homes in public housing areas in the Seoul metropolitan region to encourage early construction of private housing projects.

On October 9, LH announced that it would provide purchase guarantees for unsold homes in apartment sites acquired by private developers in the metropolitan area, specifically for those projects that begin construction by the end of 2027.

This initiative follows the government's announcement of measures to stabilize the rental and sales markets by rapidly supplying housing, aimed at reducing the burden of unsold homes on private construction companies and accelerating the pace of housing supply.

The program targets previously sold land in the metropolitan area that can be used for construction until the end of 2027, encompassing approximately 18,000 housing units.

The purchase guarantee applies only to unsold homes with a floor area of 85 square meters or less, with prices set between 85% and 92% of the market value, depending on the unsold rate, early construction status, and the size of the development. This includes an incentive of up to 3 percentage points.

Additional benefits are also available to encourage early construction. Projects that begin construction by the first half of 2027 will receive an additional 2 percentage points in the purchase price calculation, while developments with more than 500 units will receive an extra 1 percentage point.

LH believes that this purchase guarantee will alleviate the burden on private construction companies and help expedite the timing of project launches.

In particular, by committing to purchase a certain quantity of unsold homes, LH expects to enhance the creditworthiness of these projects. This is anticipated to lower financing costs and facilitate the transition to project financing for private developers, improving their business conditions.

An LH official stated, "By utilizing LH's purchase guarantee, we expect not only to improve business conditions but also to provide incentives for private housing construction if projects commence in the first half of next year. We will continue to do our utmost to rapidly expand housing supply."