Gov't to lift construction bans on more greenbelt zones to boost home supply

Deputy Prime Minister and Minister of Economy and Finance Choi Sang-mok, second from right, speaks as he presides over a meeting of real estate related ministers at the Government Complex Seoul, Thursday. Yonhap

The government will lift restrictions on greenbelt or development-restricted zones in Seoul and surrounding areas in order to identify potential sites for 80,000 new homes.

This will be the first time since 2012 that regulations on greenbelts in the nation's capital are lifted.

The government will also streamline the lengthy processes involved in reconstructing old apartment complexes and redeveloping aging neighborhoods, aiming to supply an estimated 370,000 homes in Seoul alone.

Regarding the first generation of Korea’s planned cities from the 1990s, the government will identify by November areas in Gyeonggi Province that urgently need redevelopment, with the goal of constructing over 26,000 new homes.

Additionally, the government will increase the acquisition tax exemption for first-time home buyers from 2 million won ($1,400) to 3 million won ($2,100). This exemption will apply to smaller homes, including less popular housing types such as "villas" or small residential buildings, and single or multiplex houses.

These measures were announced during a meeting of real estate related ministers, Thursday, as the government is grappling with exacerbating housing shortages in Seoul and Gyeonggi Province.

This shortage is due to more Koreans choosing to live in the densely populated capital and the greater Seoul area, despite an overall decline in the nation's population.

The shortage is exacerbated by a strong preference among Koreans for apartments, leading to apartment prices rising at a much faster rate than those of other types of homes.

“In that regard, the government wants to expand housing supply in a dramatic fashion while coping with housing demand in a preemptive manner," Deputy Prime Minister and Minister of Economy and Finance Choi Sang-mok said as he presided over the minsters’ meeting at the Government Complex Seoul.

He noted that, although the government came up with a package of housing supply measures in September 2023, home prices have been rising steeply in recent months.

 

Regarding the greenbelt, the government said it will increase the supply of homes four-fold from the initial 20,000 planned in January, in order to better address housing demand.

Of the 80,000 new homes, the government will designate sites for 50,000 homes by November, with the remaining 30,000 sites to be identified by next year.

The candidate sites are most likly to come from plateaus in southern Seoul, considering most greenbelts in northern Seoul are mountains.

To address the world's lowest birth rate, the government plans to allocate 70 percent of the 20,000 new homes for newlyweds, as well as families with infants or multiple children.

To prevent land speculation, the government will impose a temporary restriction on the sale and purchase of all greenbelt land in Seoul and the greater Seoul area starting Aug. 13. This measure will remain in effect until the announcement of candidate sites in November.

The government will work to simplify the procedures for reconstructing old apartment complexes and redeveloping aging neighborhoods.

For example, the minimum approval rate required from involved households for the reconstruction of a targeted apartment complex will be reduced from 75 percent to 50 percent.

Regarding the first-generation planned cities developed in Korea during the 1990s, the government aims to carry out a comprehensive redevelopment by 2035, with plans to build a total of 100,000 homes.

These areas are spread across Gyeonggi Province, including Bundang in the south and Ilsan in the north.

The candidate sites for the initial 26,000 homes will be selected by November, with construction potentially starting in 2029.

To qualify for the acquisition tax exemption, first-time home buyers must purchase homes that are 60 square meters or smaller and are non-apartment types.

The acquisition price of the homes must also not exceed 600 million won for properties in Seoul and surrounding areas.