Next year, 190,000 public housing units will be supplied to newlyweds and young people to expand public rental of 200,000 won per month for young people. Following the 6.27 regulations, the government cut 3.8 trillion won in the budget for regularization stepping stones and timber, and the establishment of a new installment savings instead of a “young tightening” leap account. 20.8 million won in three years for young people working in 企
The government has decided to increase the supply of housing, including public rental, but significantly reduce policy financing devoted to housing purchases and lease on a deposit basis.
The intention is to focus more on actual housing construction and rental housing supply, instead of reducing housing prices and low-interest policy loans, which serve as a “housing motivation.”
The Ministry of Land, Infrastructure and Transport announced on the 29th that it will speed up the housing stability policy for ordinary people by aiming to supply 1.1 million public housing units by 2030. Customized support for vulnerable groups, including young people and newlyweds, is also expected to begin in earnest.
The government’s budget plan for next year included specific measures such as expanding rental housing for young people and creating a customized complex for newlyweds. The government aims to supply 194,000 public housing units in 2026 alone and cumulatively supply 1.1 million households by 2030.
To stabilize youth housing, public rental housing will increase from 27,000 to 35,000 households. The number of public rental houses for newlyweds will increase from 28,000 to 31,000. Ten new childcare-friendly platforms will be installed in the public rental complex, and the government will invest about 7.6 billion won to do so.
The monthly rent support is also unconventional. The government plans to ease the burden of housing costs through a system that provides 200,000 won per month to low-income young people for 24 months.
Support for rental households will also be expanded. The rent, which is the basis for calculating housing benefits, will be raised by 4.7-11%, providing additional support of up to 39,000 won per household from 17,000 won per month. Through this, the goal is to strengthen the foundation for living stability for low-income families.
About 5,000 unsold houses will be purchased in the provinces. A budget of 500 billion won will be spent on the volume following this year’s 3,000th issue. For balanced regional development, the government decided to expand the right to budget local governments.
An official from the Ministry of Land, Infrastructure and Transport said, “We will restore the residential ladder by expanding customized support for vulnerable groups by generation, such as young people, newlyweds, and the elderly,” adding, “We also focused on balanced regional development, safety in the SOC sector, and recovery of the construction economy.”
In the financial sector, the budget for policy loans for home purchases and lease on a deposit basis will be drastically reduced to manage household debt. It has also begun to “erase the previous administration” by establishing a “youth future installment savings” as a representative work to support the formation of youth assets and suspending new support for youth leap accounts that have been operated since the Yoon Suk Yeol government.
According to the budget, the financial resources for home purchases and jeonse-related policy loans will decrease by 3.755.5 trillion won (26.7%) from 14.571 trillion won this year to 10.3016 trillion won next year. As a result, the threshold for ordinary people to buy their own homes is expected to be even higher as the budget for stepping stones (for purchase) and timber (for lease on a deposit basis) loans has decreased significantly. The financial authorities have already reduced the maximum limit on stepping stone and timber loans by 20% through the June 27 household debt measures.
744.6 billion won will be invested in Youth Future Savings, a youth asset formation support program. Only young people aged 19-34 with an income of 60 million won or less can join. The maturity period is three years. If you pay up to 500,000 won per month, the government will match and support 6% for small business owners and 12% for small and medium-sized businesses. If a young man working at a small and medium-sized company saves 500,000 won per month for three years, he can accumulate a total of 1.16 million won, including 2.16 million won in government matching subsidies. The government aims to operate products from the second half of this year through preparations for the establishment of a computer system.
![Counselors are consulting for subscription at the youth leap account non-face-to-face counseling center in T Tower, Jung-gu, Seoul. [Reporter Lee Choongwoo]](https://wimg.mk.co.kr/news/cms/202508/29/news-p.v1.20230615.b20e944b300f449c98047a225ce89986_P1.jpg)
Youth Future Savings are set to have a shorter maturity and higher government contribution than the previous government’s youth leap account. The youth leap account has a five-year maturity, which is too long, taking into account problems such as 350,000 out of 2.25 million subscribers being terminated.
With the establishment of new installment savings for young people, new accounts for young people’s leaps will be available only until this year and will be abolished from next year. The budget is also expected to decrease by 64.6% from 336.8 billion won to 119.4 billion won this year. The government plans to naturally induce young people who have signed up for the existing leap account to transfer to the youth future installment savings.
It will also invest 1 trillion won in the creation of a 100 trillion won public-private joint fund called the National Growth Fund, which will be invested in artificial intelligence (AI) transformation projects. The budget is known to be invested for the purpose of reinforcing subordinates to reduce the burden of private funds participating in the project.
The total funding consists of 50 trillion won in private funds consisting of public offering funds, pension funds, and investments from financial companies in the high-tech strategic industry fund to be operated by the Korea Development Bank.
Meanwhile, the government announced that it is considering further reducing the loan-to-value ratio (LTV) and the loan-to-deposit ratio of the deposit-to-deposit guarantee. An official from the Ministry of Land, Infrastructure and Transport said at a recent debate on Housing Finance and Housing Stability, “We have lowered (the deposit return guarantee LTV) to 90%, but it is still high,” adding, “We need a phased return to the 70-80% level.”
Regarding the lease loan guarantee ratio, he also stressed, “The pace (of reducing the guarantee ratio) may be slow due to the policy burden, but the stance is clear.” Although the June 27 measures have lowered the guarantee ratio of jeonse loans in the Seoul metropolitan area and regulated areas from 90% to 80%, it is interpreted that it can be further lowered.
