LH to Add Purchase Commitments for Unsold Homes on Public Housing Sites in the Seoul Metropolitan Area

[Financial News] Korea Land and Housing Corporation (LH) is introducing additional purchase commitments for unsold homes in private housing projects on public housing sites in the Seoul metropolitan area. About 18,000 homes are eligible, and LH will buy them at 85–92% of the supply price, depending on factors including whether construction begins early.
On the 8th, LH said the measure is a follow-up to the government’s “Plan to Accelerate Housing Supply to Stabilize the Jeonse, Monthly Rental and Home Sales Markets.” LH will offer purchase commitments for unsold homes on parcels of apartment-complex land in its public housing sites in the Seoul metropolitan area that have been bought by private developers and where construction begins by the end of 2027.
Eligible land includes previously sold sites in the Seoul metropolitan area that will be available for use by the end of 2027. About 18,000 homes to be built on those sites will be directly covered by the program.
Purchases will be limited to unsold homes with a net floor area of 85 sq. m. or less, as requested by private developers. Purchase prices will vary from 85% to 92% of the supply price depending on factors such as the unsold-home rate, construction start date and complex size. The range includes incentives of up to 3 percentage points.
Purchase prices will be higher for projects that bring forward their construction start or are developed at or above a certain scale. Projects that break ground by the first half of 2027 will receive an additional 2 percentage points, and complexes with 500 or more homes will receive an additional 1 percentage point.
LH expects the purchase commitment to serve as a safeguard against the risk of unsold homes and to encourage private developers to make construction decisions sooner. LH said the commitment will provide credit enhancement, lowering financing rates and making it easier to move to main project financing (PF), which could also improve project conditions.
An LH official said, “Using LH’s purchase commitment is expected to improve project conditions, and incentives will also be offered to projects that break ground in the first half of next year. We expect this to help encourage private-sector housing starts.” The official added, “We will continue to do our utmost to rapidly expand housing supply.”
[email protected] Choi Ga-young Reporter