[Asia Economy Reporter Lee Chun-hee] The government plans to continue its existing housing policy this year, which focuses on curbing speculation through intensive investigations and regulations, along with meeting housing demand through public-centered housing supply.
On the 20th, the Ministry of Land, Infrastructure and Transport (MOLIT) announced the '2020 Comprehensive Housing Plan' after deliberation by the Residential Policy Deliberation Committee, naming 'strengthening housing market management centered on actual demanders' as one of the key tasks for this year.
MOLIT stated, "Although the housing market has generally stabilized recently, localized price increases remain in some areas, necessitating further reinforcement of the stabilization trend," and added, "We will consistently pursue the protection of actual demanders, eradication of speculative demand, and expansion of quality housing supply, while proactively and immediately implementing additional market stabilization measures if signs of housing market instability appear."
To this end, MOLIT plans to complete the implementation of pending legislation from the December 16 real estate measures announced last year within this year.
MOLIT is preparing follow-up legislation including the 'Comprehensive Real Estate Tax Act' and 'Income Tax Act,' which raise the comprehensive real estate tax rate and capital gains tax rate on houses held for less than two years, as well as the 'Housing Act,' which introduces a 10-year ban on subscription rights for illegal resale. However, these bills have yet to pass the National Assembly. With the 20th National Assembly effectively concluding after its plenary session on the 20th, the responsibility will shift to the 21st National Assembly, which begins its term next month. Attention is also focused on whether the government and the ruling Democratic Party, which have continuously signaled a 'comprehensive real estate tax relief limited to one-home owners,' will realize related measures during the legislative process.
Since February, MOLIT's 'Real Estate Market Illegal Activities Response Team' and the Korea Appraisal Board's 'Permanent Real Transaction Investigation Team' have been operating to intensively crack down on illegal activities in the real estate market and establish orderly transactions, and these efforts will continue.
Major revisions are also underway for the price ceiling system on pre-sale prices, which is set to expand to private land areas by the end of July. MOLIT plans to establish detailed evaluation criteria for construction cost add-ons that minimize overlap between incentive-type housing performance grade add-ons and other add-ons within this month, enabling consistent reviews by local government pre-sale price review committees. Additionally, due to ongoing complaints about these committees, MOLIT will revise the pre-sale price review guidelines and conduct training for local government officials starting next month. From September, a management program will be created to monitor pre-sale price review results submitted by local governments regularly.
Recently, industry concerns have been raised that "the pre-sale price review committees are not properly recognizing construction-related costs," and that "if the price ceiling system expands to private land areas, pre-sale price calculations may be inaccurate." Whether these complaints will be resolved is attracting attention.
The housing supply plan will also accelerate. MOLIT intends to begin concrete implementation of the 'Plan to Strengthen Housing Supply Infrastructure in the Metropolitan Area,' announced on the 6th, within this year. Public redevelopment projects involving the Korea Land and Housing Corporation (LH) and Seoul Housing and Communities Corporation (SH) will complete amendments to the Housing Act and the 'Urban and Residential Environment Improvement Act,' which are prerequisites for project promotion, within this year, and secure pilot project sites through briefings and candidate site contests also within this year.
Additionally, to revitalize private housing projects in station areas, Seoul will amend its ordinance to temporarily expand the station area radius from 250m to 350m for three years, and institutional improvements such as introducing public participation in cyclical redevelopment in semi-industrial areas will be completed within this year. MOLIT plans to secure one or two pilot project sites for cyclical redevelopment in semi-industrial areas within this year as well.
The designation of districts for the supply of 300,000 metropolitan area houses, currently at 216,000 units, will be completed for the remaining areas within this year. District plans will also be prepared within this year for areas like Namyangju Wangsuk (66,000 units) and Hanam Gyosan (32,000 units), which were designated last year.
Furthermore, MOLIT will improve the consistency of unsold housing statistics by changing the reporting method from the current business entity → local government → MOLIT system to one based on actual transaction reports. The housing price trend survey sample size will also be increased from the current 8,008 weekly and 27,502 monthly samples to 9,400 and 28,360 respectively, to enhance the reliability of statistics.
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