Record 69 Trillion Won Budget to Speed Up Housing Supply... 218,000 Units to Break Ground [2027 Budget Plan]

[Financial News] The Ministry of Land, Infrastructure and Transport (MOLIT) said on the 19th that it will begin construction on 218,000 public housing units next year. The move is aimed at front-loading supply from the first year of a plan to provide 1.1 million public housing units by 2030.
To support that goal, MOLIT has drawn up a 69 trillion won budget for next year, the largest ever. Nearly half of that, or 30 trillion won, will be directed to housing supply. The ministry also plans to expand publicly led rental programs to strengthen housing options for young people. After trimming routine spending through expenditure restructuring, MOLIT said it also intends to drive growth through new projects.
MOLIT said on the 1st that its budget proposal for next year totals 69 trillion won, up 6.2 trillion won from this year. That marks a 9.9% increase from the current year. Compared with 2025, when the budget fell to 58.2 trillion won, it is up by about 18%. It is also about 13% higher than in 2024, when the budget stood at 60.9 trillion won.
The public housing supply budget was raised from 21.2 trillion won to 30 trillion won. Next year's groundbreaking target includes 172,000 public rental units and 12,000 units of publicly supported private rental housing. With nearly half of next year's budget going to public housing supply, the ministry appears determined to accelerate housing construction. The aim is also to stabilize the market by increasing supply amid a sharp slowdown in transactions and a frozen property market.
Also notable is that, of the 812 billion won total allocated to 57 new projects, more than 7.8 trillion won will go to housing-related programs. The largest share, 4.7719 trillion won, was assigned to loans and equity injections for general-purpose public rental housing. This is additional funding, excluding existing projects. Another 1.4 trillion won was set aside for youth support housing, while 169.6 billion won was allocated to an interest subsidy program for housing project financing loans. Loans for general-purpose multi-family purchase rental housing and jeonse rental housing were also budgeted at 238 billion won and 900 billion won, respectively.
Newly included in the budget are the PF anchor REIT, a real estate investment trust in which the public sector makes an early investment at the start of development projects, with 100 billion won allocated, and the PF interest subsidy program, which supports lower financing costs when housing projects that received PF loans break ground early, with 169.6 billion won set aside. MOLIT said the subsidy program could support 40,000 households in the Seoul metropolitan area, including Seoul and Gyeonggi Province. Since the current administration has shifted the benchmark for housing supply from permits to groundbreaking, the ministry said it will secure funding to ensure actual projects move smoothly to construction.
Large-scale funding and programs were also set aside to strengthen housing support for young people. Under the August 13 follow-up measures, 620 billion won will be invested in station-area youth housing and other widely preferred rental housing, such as medium-sized units. The government plans to allocate 50% of the supply of general-purpose rental housing to young people. The youth monthly rent support budget was also sharply increased from 130 billion won to 231.9 billion won. The goal is to help young people build assets despite high rents and reinforce the housing ladder. A ministry official said, "Housing difficulties for young people have become more severe than in the past, so we increased both the number of support items and the amount of funding."
Support for victims of rental scams will continue as well. MOLIT secured 84 billion won and plans to cover any shortfall when recovery payments fall below one-third of the lease deposit.
A budget was also set aside for the second-phase relocation of public institutions to regional areas. MOLIT allocated 181 billion won, but the specific list of institutions, destination regions and timing are still under discussion. The ministry said it hopes to make an announcement within the year, though nothing has been finalized yet. It added that institutions without their own assets will receive funding in the form of subsidies, such as support for employee allowances. The budget proposal could still be adjusted in detail during National Assembly deliberations.
MOLIT is also aligning with the Lee Jae-myung administration's regional development agenda. It will spend 29.4 billion won on a new project that designates old downtown areas in regional hub cities as intensive revitalization zones, supports vacant-space leasing and purchases, expands infrastructure, and encourages the inflow of young people, artists and entrepreneurs. Budget was also reflected for the smooth progress of major social overhead capital projects, including the Sejong–Anseong Expressway and GTX-A, GTX-B and GTX-C.
In addition, MOLIT said it has allocated funds to expand future mobility projects and support overseas development investment projects.
A ministry official said, "The budget proposal for next year sharply strengthens investment in projects that people can actually feel, while reducing wasteful spending through aggressive expenditure restructuring and maximizing the effect of investment."
[email protected] Jung Kyung-soo Choi Ga-young Reporter