GOV’T ANNOUNCES HOUSING SUPPLY PLANS

[Anchor Lead]

The Yoon administration has laid out a policy blueprint to provide 2.7 million houses nationwide over the next five years, including some 1.6 million units in the capital area. The measure seeks to facilitate urban development and renovation through deregulation and thereby encourage private sector-led housing supply.

[Pkg]

The government on Tuesday held a real estate-related ministerial meeting and announced plans to provide 2.7 million homes nationwide over the next five years. 1.58 million will be supplied in the greater Seoul area including 500-thousand units in the capital. The government will ease regulations to expand housing supply in urban areas.

[Soundbite] Choo Kyung-ho(Finance Minister) : "Amid low housing inventory due to stiff regulation, the gov’t will completely revamp the past method of home supply and realize a paradigm shift in housing policy."

Noting a decline in the designation of new areas for renewal and renovation, the government said that number will increase to 220-thousand units nationwide. It includes 100-thousand in Seoul and 40-thousand each in Incheon and Gyeonggi-do Province. Reconstruction costs will be lowered, while standards on passing safety inspections will be adjusted in more favorable terms. The land ministry will also introduce new incentives to private sector-led housing projects, such as those that revamp outdated areas near subway stations. There will be benefits, such as floor area ratio and tax breaks, similar to those granted to public projects. Instead, a portion of the newly built homes will be rented out as public housing, while a profit cap scheme can be adopted if necessary. The government will also provide affordable housing for young adults, newlyweds and people who have yet to own a house at prices similar to the construction cost.

[Soundbite] Won Hee-ryong(Ministry of Land, Infrastructure & Transport) : "Over 500,000 units will be provided to first-time home buyers at prices only about 70% of the market rate."

A new program will also be introduced to allow tenants to decide whether to purchase a house after residing at a rental home for a period of time. Tuesday's announcement also included plans to supply 880-thousand homes on public land. The exact locations will be disclosed sometime in October.