The commission will raise policy support for construction project financing to at least 47.8 trillion won from a planned 26.3 trillion won, Reuters reported.

At a joint briefing at the government complex in Seoul, the Ministry of Land, Infrastructure and Transport said it would push more than 230,000 additional homes into the Seoul metropolitan area by accelerating development on public land, lifting some greenbelt restrictions and backing private projects, according to Yonhap News Agency.

Chairing a meeting of senior secretaries at Cheong Wa Dae hours later, President Lee Jae Myung said the property bubble had reached a level that could no longer be left unchecked and called real estate a time bomb threatening household livelihoods and the country's future, Yonhap reported.

Permitting procedures should be compressed and land secured aggressively, he said, including by rewriting laws and regulations if necessary.

The FSC lifted its household debt growth target for the year to around 3% from 1.5%, a change Seoul Economic Daily reported will free up roughly 30 trillion won ($21.2 billion) in additional lending capacity in the second half.

FSC Chairman Lee Eok-won said the commission would keep existing loan-to-value and debt-service ratio rules intact while ensuring the tighter lending regime does not choke off credit to genuine homebuyers or new construction, The Korea Times reported.

The package introduces a longer-term mortgage for young borrowers, a new guarantee product for jeonse deposit refunds, and wider use of expected future income in debt-service calculations, which would let younger workers borrow more against earnings they have yet to make.

An aerial view shows apartment complexes and residential area in Seoul, South Korea, Oct. 5, 2020. Photo by Reuters

Seoul Economic Daily reported a separate policy mortgage allowing buyers aged 39 and under to purchase non-apartment housing worth up to 400 million won ($282,000) at an interest rate in the 3% range without forfeiting first-time-buyer benefits.

Newlyweds will keep certain policy loan eligibility based on their individual circumstances rather than losing access once their incomes are combined after marriage, with revised standards taking effect in October.

The FSC said it would maintain or tighten curbs on speculative demand and step up monitoring to distinguish loans funding actual home purchases from those chasing price gains.

About 100,000 of the additional homes will come from newly designated public housing districts in Seoul's Gangseo area and in Namyangju and Gwangju in Gyeonggi Province, Yonhap reported.

The ministry will also accelerate previously announced plans for more than 60,000 homes on underutilized land, including a military golf course in northern Seoul and the former Seoul Racecourse site in Gwacheon.

For newly designated sites, it plans to cut the stretch between site announcement and groundbreaking to 37 months from 68 under a fast-track model. Land Minister Kim Yun-duk said building market confidence mattered most, acknowledging public skepticism over whether the government would follow through.

Nationwide home purchase prices rose 0.33% in June from May, up from a 0.21% gain the previous month and the largest monthly increase since November 2021, according to Korea Real Estate Board data.

Seoul climbed 1.03%, its steepest since October 2025, with Seongbuk District up 1.39% and Gwangjin and Guro both up 1.31%.

Lee's approval rating fell to 51% in a Gallup Korea survey of 1,003 adults conducted July 21 to 23, a third straight weekly decline from 54% and a return to his post-inauguration low, the Korea JoongAng Daily reported.

Real estate policy was the most-cited reason for disapproval at 22%, the first time it has topped the list since he took office in June last year.

Earlier this month the government proposed rewriting the comprehensive real estate holding tax to assess owners by the value of their property rather than the number of homes they hold.

The Korea Herald reported the plan raises the basic deduction for owner-occupied single homes to 1.4 billion won ($988,000) from 1.2 billion won while cutting it to 900 million won ($635,000) for single homes the owner does not live in, for a net revenue gain the government puts at 3.44 trillion won ($2.43 billion) a year.

More than 5,000 public comments were filed against the holding tax amendments during the notice period that opened Aug. 4, and the finance ministry signaled on Aug. 12 that it could revise key provisions, UPI reported. Lee said a day earlier that the proposal was not final.

The ruling Democratic Party launched a housing task force the same week.