The Korea Land and Housing Corporation (LH) is set to unify the calculation method for purchase prices of newly constructed rental housing based on appraisal evaluations. This change aims to mitigate controversies surrounding high purchase prices and accelerate the supply of housing within urban areas. LH announced on the 18th that it would begin actively pursuing the acquisition of 38,000 rental units nationwide this year, following the establishment of a transparent and rational purchase rental system.

The rental purchase program allows LH to buy newly built and existing houses located in urban areas with good transport accessibility, and then lease them at affordable rates. However, there has been ongoing controversy regarding the price criteria for acquiring newly built houses from private developers. President Lee Jae-myung raised concerns during a Ministry of Land, Infrastructure and Transport briefing last December, claiming that some houses valued at 100 million won were being sold to LH for as much as 120 million won, suggesting that private developers were exploiting LH as a 'fool.'

In response to these issues, LH has decided to abolish its previous 'construction cost-linked' pricing system which was applied to housing with more than 50 units in the metropolitan area. Instead, the corporation will adopt an appraisal-based pricing system that more accurately reflects market prices for purchasing newly constructed rental housing. For existing homes, the purchasing approach will remain unchanged, calculating land based on appraisal value and the building based on 'reproduced cost' while ensuring that the purchase price does not exceed a fair appraisal value based on nearby market conditions. LH is also introducing measures to ensure a clear timeline for purchase decisions and plans to implement an online system for sellers to track the status of their applications throughout the process.