From Yoon Su-il's classic song "Apartment," once called a national anthem, to BLACKPINK Rosé's "APT," which took the world by storm, it is no exaggeration to say that apartments are Korea's representative form of housing. But as the sale price of Seoul apartments has soared to 58.38 million won per 3.3 square meters, raising housing cost burdens, and as competition has intensified with first-priority subscription ratios reaching 38 to 1, a growing number of end users are turning their attention to non-apartment housing. A worker I recently met at a Korea Housing & Urban Guarantee Corporation (HUG) Deundeun Jeonse information booth showed interest in "practical" non-apartment housing, saying, "Considering housing costs and commuting time, I think a villa near work is better than an apartment in a distant area."
According to the "2024 Population and Housing Census" released by Statistics Korea, 46.9% of all general households in Korea live not in apartments but in non-apartment housing such as row houses and multi-family homes, detached and multi-household homes, and officetels. Unfortunately, however, the supply of non-apartment housing has been declining sharply in recent years due to rising construction costs, a contraction in the real estate project financing (PF) market, and a villa avoidance phenomenon caused by large-scale jeonse (a Korean lease system requiring a large lump-sum deposit instead of monthly rent) fraud. The once-reliable housing ladder is being shaken.
To resolve this housing instability, the non-apartment supply ecosystem must be restored as quickly as possible. Non-apartment housing can be supplied faster than apartments, allowing new units to be provided in urban areas over a short period. In particular, it can deliver an immediate housing supply effect in areas where jeonse and monthly rent demand is concentrated, helping stabilize the market in the short term. The government has also recognized this situation and expressed its intent to supply non-apartment housing without limit in regulated areas of the Seoul metropolitan region.
In line with this government policy, HUG plans to provide sweeping financial support to revitalize non-apartment supply. The key is to establish non-apartment-specialized guarantees to lower financing barriers for businesses, thereby driving rapid housing supply. By introducing a "special non-apartment sales guarantee," HUG will overhaul its sales guarantee review standards, which previously focused on apartments, to reflect the characteristics of urban-type living homes and officetels. Guarantee fees will also be discounted by about 30% compared with existing guarantees, easing the burden on businesses.
The "special PF guarantee" takes into account the somewhat lower credit ratings of contractors at non-apartment sites, lowering the weight given to contractor evaluation and raising the weight given to business viability compared with existing PF guarantees. Through this, HUG aims to help advance projects that have strong business viability but faced temporary difficulties in financing. In addition, the guarantee fee discount offered for early sales will be raised by 20 percentage points from existing guarantees, applying a maximum discount of 45% to further accelerate supply.
Furthermore, HUG will provide a "special mortgage guarantee" to businesses seeking to convert unsold non-residential buildings in the metropolitan region into residential officetels. Through this, businesses can quickly repay relatively high-interest senior bonds and smoothly finance remodeling construction costs. Neglected buildings in urban areas are expected to be rapidly transformed into quality living spaces. In addition, HUG plans to expand its Deundeun Jeonse Housing project, which mainly supplies non-apartment housing such as multi-household homes and officetels, sharply increasing the supply scale from about 1,800 units last year to 3,600 units this year.
A healthy and sustainable housing market can never be completed by relying entirely on a single form of housing. If the supply of quality apartments satisfies people's housing desires, rapidly supplied non-apartment housing serves as an essential framework for building the basic housing foundation for ordinary citizens and young people. Only when apartments and non-apartment housing achieve balance and offer diverse options will our society's housing ladder be restored and made even more solid.
