Is the Government's New Real Estate Policy Direction Settling on 'REITs'?

Establishment of REITs Reporting Consultation Center and Foundation Built through REITs Information Provision System Development

The government is reportedly actively considering "REITs" to revitalize the real estate market. On the 18th, the Ministry of Land, Infrastructure and Transport announced that it will operate a consultation center for REITs-related reports and establish a system to provide REITs-related information to the public.

On the 8th, following the government's proposal in the "Plan to Strengthen Housing Supply in the Metropolitan Area" to utilize REITs for public rental housing to promote redevelopment, this move is interpreted as laying the groundwork to actively utilize and foster REITs for the future revitalization of the real estate market.

Currently, the government is strengthening loan regulations in the real estate market to curb indiscriminate speculative demand, but the side effects of this are increasingly severe. As loans become more difficult to obtain, a structural problem is emerging where some existing homeowners or those with ample funds to invest in real estate monopolize the profits from rising real estate values.

Experts interpret that REITs are suitable for solving the current issue of "benefit monopolization by certain groups." They also evaluate that it aligns with the government's policy to provide real estate investment opportunities to the entire population, share profits, and increase the supply of rental housing.

REITs refer to pooling funds from investors to invest in real estate and share profits. REITs are characterized by allowing anyone to invest and enabling investment in real estate with a small amount of money.

Meanwhile, as the government proactively expresses its intention to promote REITs, interest in REITs is also rising in the private sector.

Recently, in Dapsimni 17 District, where SH Corporation under Seoul City is in charge of implementation, active movements such as considering the sale of general sale units through REITs are taking place. However, not long ago, during the bidding process for Banpo 3 District by Daewoo Construction, a proposal was made for REIT investment in the general sale units of reconstruction, but Seoul City judged this as an act to "evade the price ceiling system" and issued a guideline of "disapproval."