Land Minister Hong Ji-seon Meets Homebuilding Industry, Vows to Quickly Address On-the-Ground Concerns

[Financial News] With housing construction starts in the Seoul metropolitan area remaining at just over a third of this year's target, Minister Hong Ji-seon of the Ministry of Land, Infrastructure and Transport met with the private homebuilding industry to hear about on-the-ground difficulties hindering supply.
According to MOLIT, Hong held a meeting on the morning of the 6th at the Korea Territorial Development Exhibition Hall, attended by three housing construction-related associations—the Korea Housing Association, the Korea Housing Builders Association and the Real Estate Development Association—and their member companies. The meeting was organized to identify obstacles to expanding supply, in line with a housing policy approach that prioritizes on-the-ground realities and pragmatism, and to find ways for the government and industry to work together on support measures.
The meeting gave in-depth consideration to proposals for improving regulations submitted by the three associations. Industry participants detailed the factors holding back supply, drawing on their experience in the field. MOLIT agreed to immediately implement changes that can be made right away, and to consider in follow-up discussions issues requiring coordination with other ministries, such as taxation and finance. It also agreed to continue working with the industry to find alternatives for matters that cannot be addressed immediately. In particular, financing for housing supply, including project financing (PF), which many companies say is a major challenge, will be closely managed on a project-by-project basis through the Integrated Housing Supply Support Center, in coordination with the Financial Services Commission (FSC), the Financial Supervisory Service (FSS) and other agencies.
The industry said government supply policies—including easing construction regulations for urban-type housing, relaxing financial and tax regulations on newly built homes, and allowing vacant commercial properties and knowledge industry centers to be converted to other uses—were gradually having an impact on the ground. It said it would work with the government to resolve various issues facing the industry.
In its August 13 Housing Rapid Supply Plan, the government raised its target for housing construction starts in the Seoul metropolitan area by 2030 from 1.35 million homes under the September 7 Real Estate Measures to 1.5 million. But progress remains slow. According to MOLIT housing statistics, 96,047 homes were started in the Seoul metropolitan area from January through September this year, down 5.7% from a year earlier. Looking at September alone, starts plunged 43.3% to 9,308 homes. That is 35.8% of this year's annual target of 268,000 homes for the Seoul metropolitan area. At last month's National Assembly audit, Minister Hong predicted that the government could meet 80–88% of its annual target, as housing starts tend to be concentrated in the fourth quarter. Since September, the government has also been operating the PF and Construction Company Financing Difficulties Relief Center, with the FSS and Korea Development Bank (KDB) serving as points of contact.
Minister Hong said, "The private sector, which has accounted for at least 80% of housing supply in the Seoul metropolitan area, has a more important role than ever in addressing the region's housing supply-demand imbalance." He said, "The views of the homebuilding industry, based on its experience on the ground, will be very useful in formulating policies to promote private-sector supply." Hong added, "To achieve our target of starting construction on at least 1.5 million homes in the Seoul metropolitan area over the next five years—the largest supply target of any previous government—we will communicate more actively with the industry and spare no effort in providing the support needed on the ground to expand supply."

[email protected] Jeong Gyeong-su Reporter