Posted October. 21, 2008 09:32,
The government and the ruling Grand National Party yesterday agreed to spend three trillion won (2.27 billion U.S. dollars) to buy unused land owned by private construction companies.
The administration will also repurchase land bought by builders from state-run agencies and reorganize systems to allow construction companies to resell public housing land.
The ruling camp also agreed to come up with measures on such plans and confirm them at a contingency committee today.
Korea Land Corp. will spend three trillion won to buy idle land from private builders by issuing land development bonds.
The state-run company will buy land set to be put on the market by construction companies to repay debt. Additional screening procedures will help determine what land to purchase.
Land owned by manufacturers is not included, but the government will consider buying manufacturers land depending on the economic condition.
Construction companies will also be allowed to cancel contracts on land sales with the land corporation. In such a case, the down payment worth 10 percent of the land price will go to the government but the remaining amount will be refunded to builders.
Under the measure, construction companies will be allowed to resell land purchased from state-run organizations to other builders or companies. Though the government has prevented land bought from state-run organizations from being resold since 2005, it will make an exception to the Act on Land Development Promotion to allow the sale of idle land owned by construction companies.
Asset management companies could also be allowed to launch investment funds for the some 160,000 unsold houses nationwide. Korea Housing Guarantee Co., Ltd. will also invest around two trillion won into the fund.