LH to buy unsold apartments

[Anchor]

The government has announced measures in response to the construction industry recession.

The Korea Land and Housing Corporation (LH) will purchase some unsold apartments, referred to as 'malicious unsold units,' after their completion.

Reporter Lee Seung-cheol investigates whether this will have any real effect.

[Report]

An apartment in Suseong District, Daegu, has been occupied for just over a year.

At the time of sale, Suseong District was a popular area designated as a speculative overheating zone, but 46 units are still looking for owners.

The number of unsold apartments after completion, which is a significant burden for the construction industry, exceeded 20,000 last year.

80% of these are located outside the capital region.

LH has decided to purchase these unsold apartments.

[Choi Sang-mok/Acting President: "LH will directly purchase 3,000 unsold apartments in the provinces and will consider expanding the purchase scale depending on market conditions."]

LH plans to use the purchased apartments as 'Dundun Jeonse Housing,' leasing them for at least six years before converting them to sale.

The issue is how much lower the purchase price will be set compared to the sale price.

LH previously purchased unsold homes at less than 70% of the sale price for three years starting in 2008 during the global financial crisis.

[Jang Doo-hwan/Chairman of the Suseong Yongdu District Redevelopment Housing Association: "If we are eligible, we will participate in the sale process, but if it goes down to 70%, we will have to reconsider."]

The government explained that there will be no additional budget allocation, as LH will utilize the budget already allocated for rental housing purchases.

However, in the provinces, where even the real estate rental market is stagnant, LH may have to bear all the burdens.

Additionally, it is uncertain whether the unsold apartments will attract rental seekers.

The current measures do not include temporary easing of loan regulations for the provinces.

The government stated that it will decide by April or May whether to include the provinces in the loan regulation tightening scheduled for July.

KBS News, Lee Seung-cheol.