Real Estate Policy Shifts from 'Tax Strengthening' to 'Supply Expansion' Focus... "Reorganization Centered on Actual Demand Ongoing"

Deputy Prime Minister Hong Nam-ki Chairs Real Estate Market Review Ministerial Meeting
"Top Priority is New Housing Supply" Emphasized

Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, is delivering opening remarks at the "13th Real Estate Market Inspection Meeting of Related Ministers" held on the 15th at the Government Seoul Office in Jongno-gu, Seoul. Photo by Kang Jin-hyung aymsdream@

[Sejong=Asia Economy Reporter Kim Hyunjung] The government has shifted the focus of this year's real estate market stabilization policy from 'tax strengthening' to 'supply expansion.' Each time a high-intensity real estate measure was announced, housing prices surged due to a shortage of listings, so the government has changed direction to stabilize the market by increasing supply. However, it firmly stated that there will be no changes to the plan to strengthen capital gains tax, which will take effect from June 1. The government and Seoul City have proposed a plan to supply an additional 4,700 housing units in the high-demand central Seoul area.

On the 15th, Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, chaired the first real estate market inspection meeting of the year at the Government Seoul Office, stating, "We will maintain the policy stance of blocking speculative demand and protecting actual demand this year, while making every effort to secure available housing supply." Hong emphasized, "The top priority is new housing supply," and pledged to accelerate public redevelopment and reconstruction projects. Public redevelopment and reconstruction involve public participation in existing maintenance projects, granting zoning upgrades, procedural support, and increasing contributions of rental housing.

On the same day, the Ministry of Land, Infrastructure and Transport and Seoul City announced eight candidate sites for the first pilot projects of public redevelopment: ▲ Sinmunno 2-12 ▲ Yangpyeong 13,14 ▲ Bongcheon 13 ▲ Sinseol 1 ▲ Yongdu 1-6 ▲ Gangbuk 5 ▲ Heukseok 2. Hong said, "Since each candidate site is located in transit-oriented areas suitable for high-density development, if developed as planned, an additional 4,700 housing units will be supplied in central Seoul." He added, "For the 56 districts not included in this review, the selection results will be announced in March."

Regarding public reconstruction, he mentioned, "Among the 15 complexes that applied for preliminary consulting, seven complexes have incorporated measures to secure public interest such as contributions, zoning upgrades, and relaxation of regulations on the installation ratio of non-residential facilities in mixed-use buildings." He explained, "According to the preliminary consulting results, when public reconstruction is implemented, the number of housing units supplied per complex is expected to increase by an average of 58% compared to the current level, and the burden on union members is estimated to decrease by an average of 37% compared to reconstruction conducted solely by the union." The seven complexes participating in the public reconstruction preliminary consulting include ▲ Sinbanpo 19th in Seocho-gu ▲ Mangu 1 district in Jungnang-gu ▲ Junggok Apartment in Gwangjin-gu ▲ Singil 13 district in Yeongdeungpo-gu ▲ Miseong Geonyeong in Gwanak-gu ▲ Gangbyeon and Gangseo in Yongsan-gu, with one site requesting confidentiality.

Regarding preliminary subscription, Hong stated, "Starting with Incheon Gyeyang-eul in July this year, a total of 62,000 housing units are being prepared without delay until next year," and added, "We will provide detailed plans such as subscription schedules by location in April."

Regarding last year's real estate policy evaluation, he said, "The market is being reorganized around actual demand," but added, "Recently, instability in the sales market has been detected, and we are monitoring while expecting listings from multi-homeowners and others." He also announced additional supply measures, saying, "We will promptly prepare various supply plans and present them next month."