Ministry of Land, Infrastructure and Transport Initiates Safe Buyback Project for 10,000 Unsold Units in Local Areas... 3,000 Units to be Purchased Within the Year

[Financial News] The Ministry of Land, Infrastructure and Transport announced on the 4th that it will actively promote the 'Local Unsold Safe Buyback Project' to revive the local construction market. Starting with 3,000 units by next year, a total of 10,000 units will be supported by 2028.
The Safe Buyback Project targets housing with a construction progress rate of over 50% at local sales guarantee sites. The Housing and Urban Guarantee Corporation (HUG) supports up to 50% of the sale price of unsold housing before completion, and grants the construction company the right to buy back within a year after completion. This allows construction companies to prepare self-rescue measures such as discounted sales, and enables the project sites to continue completion stably.
The government reduced HUG's funding burden by issuing and lending 250 billion won through a supplementary budget this year. As a result, the procurement cost reflected in the buyback price is lowered, allowing construction companies to benefit from low-interest loans of about 3-4%. Additionally, acquisition tax, property tax, comprehensive real estate tax upon HUG's acquisition of unsold housing, and exemption of acquisition tax upon construction company's buyback will be pursued to significantly reduce the buyback burden.
The support scale will be expanded sequentially to 1,500 units each in September and November this year, 3,000 units in 2026, 2,000 units in 2027, and 2,000 units in 2028. After receiving applications from construction companies, the government will hold a review committee involving external members to comprehensively evaluate price appropriateness, completion feasibility, safety, etc., and select support targets.
The Ministry of Land, Infrastructure and Transport expects this project to play a role in relieving the financial difficulties of construction companies struggling with high-interest PF loans and unsold units.
Kim Kyu-cheol, Director of the Housing and Land Office at the Ministry of Land, Infrastructure and Transport, said, "This Safe Buyback Project provides a low-interest loan effect of about 3-4% to construction companies experiencing difficulties due to high-interest PF loans and unsold units," adding, "We believe it will contribute to expanding housing supply by preventing moral hazard of construction companies and inducing self-rescue efforts."

en1302@fnnews.com Jang In-seo Reporter