South Korea increased financial support for housing construction projects to 47.8 trillion won (US$33.7 billion) from a previously planned 26.3 trillion won on August 13, 2026, aiming to boost housing supply amid rising prices [1, 2, 3].
The government announced new policy loans and expanded financial assistance specifically targeting young people and newlyweds buying homes to live in, while maintaining or tightening controls on speculative demand to stabilize the market [1, 2, 3]. The Financial Services Commission said it seeks to "stabilise the property market by stimulating housing supply and through a comprehensive financial package for young people and those with actual demand" [1].
Household debt growth will be managed at around 3% in 2026, up from an earlier target of 1.5%, reflecting tighter borrowing rules to curb excessive debt [1, 2, 3]. Earlier this month, President Lee Jae-myung’s government also proposed higher taxes on wealthy homeowners as part of efforts to contain rising property costs [1, 2, 3].
Lee called the housing market a "real estate bubble" and a "ticking time bomb" threatening the country's future. He said, "The real estate bubble has reached a level that can no longer be left unchecked. If this situation continues, we could face what happened in a certain country – the so-called ‘lost decades’. We must concentrate all available means and capabilities on solving the real estate problem – a ticking time bomb that threatens people’s lives and the country’s future" [3].
However, Lee’s approval rating has declined amid rising house prices and market volatility. A Gallup Korea poll released on July 24 showed his approval at 51%, a one-month low [1, 2]. By August 14, a new poll indicated his approval had dropped further to 44%, with support particularly low (30%) among voters in their 20s [3]. Support for Lee’s Democratic Party fell to 41%, while the opposition People Power Party gained to 25% [3].
The government’s expanded housing package aims to increase supply and support genuine homebuyers while managing risks of speculative demand. The next key gauge of impact will emerge as the financial year unfolds and further polling tracks public response and housing market trends.
