Purchases reach just 16% of government goal
'Current program structure out of touch with reality on the ground'
A Korea Housing and Urban Guarantee Corporation program designed to revive regional construction activity has approved purchases of only 16 percent of its government-set target, data released Thursday showed.
According to materials submitted to People Power Party lawmaker Jung Seok-jun of the National Assembly's Land, Infrastructure and Transport Committee, the program had approved purchases of 972 units as of September — just 16 percent of the 6,000-unit target set for the period from the second half of last year through this year.
Under the program, HUG buys unsold units in regional markets before completion — covering properties enrolled in pre-sale guarantees with construction at least 50 percent complete — on a repurchase-option basis, providing short-term liquidity to construction companies while giving them the right to buy the units back.
The Ministry of Land, Infrastructure and Transport announced last year, through a second supplementary budget and a regional construction investment package, that it would inject 250 billion won ($186 million) in government subsidies and loans to support a total of 10,000 units over three years from 2025 to 2028. The 6,000-unit figure covers the target from the second half of 2025 through this year.
HUG's submitted data show approved purchases totaling 972 units across nine project sites — 67 units at two Busan sites in 2025, and 410 units at two Busan sites, 399 units at three Gwangju sites, and 96 units at one South Jeolla Province site in 2026 — amounting to 423.1 billion won in total.
HUG attributed the weak performance to developers finding the one-year repurchase period too burdensome and choosing instead to clear their unsold inventory through discounted pre-sales and other self-help measures. The corporation said it plans to push for purchases of 3,000 units by year-end and will consult with related ministries on extending the repurchase period from one year to two years to improve results.
Industry players have called the program's eligibility criteria and repurchase timeline too strict to provide meaningful liquidity relief, urging the government not only to extend the repurchase period to two years but also to lower the construction completion requirement from the current 50 percent to 30 percent.
The government applied a 30 percent completion threshold in its conditional buyback program for unsold units from the seventh round onward in 2010, and offered a two-year repurchase period during the 11th round in 2012. Jung said the persistently weak results despite higher support prices signal a structural disconnect between the program and conditions on the ground. "The program must be promptly revised to reflect the voices from the field — not just by extending the repurchase period, but also by easing the completion-rate requirement," he said.
mp1256@heraldcorp.com
