Kim Hyun-mi: "(Recent Market Situation) Apologetic Feelings... Measures Will Work Once Legislation Is Enacted"

Minister of Land, Infrastructure and Transport Kim Hyun-mi is attending the '10th Emergency Economic Central Countermeasures Headquarters Meeting' held at the Government Seoul Office in Jongno-gu, Seoul on the 10th. Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Kim Yuri] On the 10th, Kim Hyun-mi, Minister of Land, Infrastructure and Transport, appeared on SBS 8 o'clock News to explain the 7·10 real estate measures announced that day, saying, "As the minister in charge of housing policy, I feel sorry (about the recent market situation)" and added, "(If the legislation related to the recent real estate measures is enacted) the measures will be effective."

Minister Kim pointed out that the reason for the continuous rise in housing prices is "the global situation of excess liquidity and low interest rates, which is causing money to flow into housing." He emphasized, "The government has been consistently pursuing policies to protect actual demanders, but all measures including the December 16, 2019, June 17, 2020, and today's measures require legislative support to be effective." He explained that this has limited the effectiveness so far. Minister Kim said, "If legislation is enacted, I believe it will be effective."

Regarding the question of whether the balloon effect from pinpoint designation of regulated areas was not anticipated, he replied that there were limitations due to the lack of legislation. Minister Kim explained, "Fundamentally, legislative measures must be in place to recover and prevent massive unearned income."

Regarding concerns that the significantly increased holding tax and capital gains tax on multi-homeowners might be passed on to tenants or through gifts, he explained that the capital gains tax hike implementation was postponed because some supply is expected to come out. On passing the burden to tenants, he said, "Currently, the Lease 3 Act bill has been submitted to the National Assembly and is scheduled to be discussed in this session," adding, "(If passed) there will be limits to landlords passing the tax burden onto tenants." Minister Kim added, "The government is reviewing measures related to gifts."

Regarding President Moon Jae-in's instruction to "increase supply even if it has to be excavated," he said, "The 'Housing Supply Expansion Task Force (TF)' chaired by Deputy Prime Minister Hong Nam-ki includes central and local governments, and will review easing urban planning regulations for high-density development in urban areas and ways to utilize vacant stores and officetels," adding, "We are also considering public participation in redevelopment and reconstruction to increase floor area ratio and rental supply." In response to earlier statements that there would be no easing of redevelopment and reconstruction regulations, he answered with public participation in reconstruction. He explained that public participation in reconstruction and redevelopment will secure public interest and speed. Regarding the lifting of development restriction zones (Greenbelt), he said, "We will closely consult with local governments on such issues."

Regarding complaints that tightening loans to catch speculative forces has removed the ladder for young people, he emphasized, "Strictly speaking, jeonse loans are to help low-income people without homes find housing," and "If used for gap investment, it will cause these people to raise housing prices again, which is inappropriate." Minister Kim said, "It is desirable to increase opportunities by increasing subscription supply or supplying low-priced units in the 3rd new towns through pre-subscription systems."

Regarding the 'ministerial responsibility theory' raised by some, he said, "As the minister in charge of housing policy, I feel sorry to the younger generation (about the recent market situation)" and emphasized, "To solve these problems, systems must be established fundamentally so that people can feel less anxious." He added, "Personally, I have no ambition for the position."

Regarding the recent pressure on public officials to "sell all but one house," he said, "It would be good for public officials to set an example, but fundamentally what needs to be done is to establish institutional measures so that unearned income cannot be obtained in the housing market."