South Korea’s Financial Services Commission (FSC) said on Thursday it would raise financial support for construction projects and ease lending rules for young homebuyers, as part of a broader push to stabilise a housing market President Lee Jae Myung called a “ticking time bomb.”
The FSC will lift policy support for financing construction projects to at least 47.8 trillion won ($33.72 billion), up from a previously planned 26.3 trillion won, aimed at boosting new housing supply. It also unveiled new policy loans for young people and newlyweds buying a home to live in, while maintaining or tightening restrictions on speculative demand. Household debt growth will be managed at around 3% this year, up from a previous 1.5% target — the FSC’s stated attempt to balance easier access for owner-occupiers against curbing riskier borrowing.
The package follows an earlier proposal this month to raise taxes on wealthy homeowners, part of the Lee government’s response to house prices that rose in June by the most since November 2021. Lee’s approval rating hit a one-month low of 51% in a July 24 Gallup Korea survey, with housing policy cited as a main factor.
“The real estate bubble has reached a level that can no longer be left unchecked,” Lee said, warning that Korea risked repeating the “lost decades” experienced by “a certain country” if the situation continued.
The FSC’s announcement did not specify eligibility terms — such as income caps or residency requirements — for the new policy loans, leaving open how accessible the scheme will be beyond first-time domestic buyers.
References
Reuters – South Korea unveils package to boost housing supply, support young buyers
