Breaking Down Barriers: LH’s Ambitious Plan to Acquire 110,000 Homes and Revolutionize High-End Purchases with Enhanced Safety Features
Korea Land and Housing Corporation to Increase Debt to Expand Housing Supply
In a bid to address the housing supply shortage, the Korea Land and Housing Corporation (LH) has decided to increase its debt to secure the necessary funds for the development of the third new city and new national industrial complex.
President Lee Han-jun speaking at a briefing session on current issues with LH new construction rental housing.
By next year, 110,000 new rental housing units, including villas and officetels, will be supplied. This move is expected to help alleviate the housing shortage in the country.
LH President Lee Han-joon emphasized that the corporation’s debt is structured differently from other public institutions, as it borrows debt to acquire assets that can be recovered by selling the land after 5-6 years.
Of the 153 trillion won in LH debt, 64.6 trillion won is accounting debt that does not bear interest, such as rental deposits, while 88.3 trillion won is debt that does bear interest. About half of the interest-bearing debt, 45.4 trillion won, is a loan from the Housing and Urban Development Corporation for public projects.
LH to Increase Workforce to Focus on Securing Purchase Volume
LH plans to increase its workforce for purchasing housing in the metropolitan area from 4 teams and 87 people to 9 teams and 200 people. This move is aimed at focusing on securing purchase volume in the metropolitan area.
Government Support Rate to be Increased
LH has decided to suggest to the government to raise the unit price of rental housing support to ensure smooth supply. The government support rate is expected to be increased to 95% by 2028.
Measures to Prevent Controversy over High-Price Purchases
To prevent controversy over high-price purchases and the enrichment of construction companies, LH has decided to block any intervention by sellers during price appraisals. The purchase price will be determined by taking the average of the amounts assessed by two appraisal agencies.
A ‘construction cost-linked’ price calculation method has been introduced when purchasing houses with 100 or more households in the metropolitan area. This method determines the purchase price based on the appraised value for land and the construction cost for buildings.