Government Plans to Boost Housing Supply and Strengthen Provision of Housing Finance Support for Young Adults

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Government Plans to Boost Housing Supply and Strengthen Provision of Housing Finance Support for Young Adults Aug 13, 2026

The government introduced plans to boost the supply of housing and strengthen the provision of housing finance support for non-speculative homebuyers and renters (especially young adults) at an inter-ministerial joint briefing held on August 13. At the joint briefing, the Ministry of Land, Infrastructure and Transport (MOLIT) announced plans to swiftly boost housing supply to bring stability to the housing market and the Financial Services Commission introduced comprehensive financial sector measures to help stabilize the real estate market.

The measures being introduced today are aimed at shoring up the supply of housing which has seen a continuous trend of slowing down since after 2022 by seeking innovative ways to boost the quantity, pace, and distribution of housing and revitalize the supply ecosystem. At the same time, the financial sector measures are intended to facilitate the supply of housing and help to resolve the housing finance needs of non-speculative homebuyers and renters (especially young adults) while ensuring the maintenance of consistent and effective policies (household debt management measures introduced on June 27, 2025) in managing speculative demand for housing loans.

Key Financial Measures

The financial sector measures introduced by the FSC will expand the provision of financial support intended to shore up the supply of housing and strengthen the availability of financial assistance tailored to the specific needs of non-speculative homebuyers and renters especially for young adults.

First, the provision of public guarantee support and other types of financial assistance for real estate project finance will be expanded significantly (from KRW26.3 trillion previously to KRW47.8 trillion-plus) to propel housing development and accelerate the supply of housing. The public sector guarantees for real estate project finance will be supplied in the amount of KRW23 trillion this year and KRW33 trillion next year to facilitate prompt initiation of housing development and construction projects. Along this line, the financial sector will actively assist and help to revitalize the housing development and construction projects that have been temporarily put off due to financing difficulties by utilizing KRW3 trillion from the Korea Asset Management Corporation (KAMCO)’s real estate PF market normalization fund, KRW5 trillion in syndicated loan prepared by the banking and insurance sectors, and up to KRW10 trillion in funds drawn up by financial sectors. In addition, there will be other types of regulatory support designed to promote housing development and construction projects. In this regard, there will be a new guarantee program introduced for urban renewal projects by the Korea Housing Finance Corporation (HF). The method for calculating loan-to-value (LTV) ratios for temporary relocation borrowers will be updated to free up more room for relocation loans. The phasing in of equity capital requirement (previously planned to kick in from 2027) for real estate development projects will be postponed for two years until 2029.

In the meantime, there will be consistent efforts to effectively manage speculative demand for housing loans. Excessive demands for housing loans will be controlled through strengthening the management over jeonse loans, tightening income standards for calculating a borrower’s debt service ratio (DSR), and bolstering capital rules on mortgage loans through increased risk weights and the introduction of a sectoral systemic risk buffer (sSyRB). At the same time, a set of housing finance assistance programs targeted at young adults will be newly introduced to boost the provision of housing finance support for non-speculative homebuyers and renters. Considering the need to expand the supply of housing and boost the availability of housing finance for non-speculative homebuyers and renters, the total volume of annual household debt growth target for this year will be raised to a 3-percent level from the initially planned level of 1.5 percent.

Further Plan

The government will newly establish and operate an inter-ministerial meeting on boosting the supply of housing chaired by Prime Minister to more closely check related schedule and follow up on progress while strengthening coordination and collaboration between related ministries.

A situation board demonstrating the status of housing supply by issue and district and in weekly units will be newly created at the Office for Government Policy Coordination to make sure to more comprehensively manage progress and developments.

• Please refer to the attached PDF for details.

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