[Weekly Review] Government Shifts Real Estate Policy to 'Supply Expansion'

Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, is seen 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@

[Asia Economy Reporter Moon Chaeseok] The government is shifting its real estate market stabilization policy this year from 'strengthening taxation' to 'expanding supply.' The government and Seoul City have decided to supply an additional 4,700 housing units in the high-demand central areas of Seoul. However, they firmly stated that the capital gains tax strengthening policy, which will take effect from June 1, will remain unchanged.

◆ "Increasing supply to control housing prices" = Hong Nam-ki, Deputy Prime Minister and Minister of Strategy and Finance, said at the first real estate market inspection meeting of the year held at the Government Seoul Office on the 15th, "We will maintain the policy stance of blocking speculative demand and protecting actual buyers this year, while making every effort to secure available housing supply."

Deputy Prime Minister Hong emphasized, "The top priority is new housing supply," and said that the government would accelerate public redevelopment and reconstruction projects. This involves public participation in existing maintenance projects, granting zoning upgrades, procedural support, and increasing contributions of rental housing.

The Ministry of Land, Infrastructure and Transport and Seoul City announced that they have selected eight candidate sites for the first pilot projects of public redevelopment: Sinmunno 2-12, Yangpyeong 13 and 14, Bongcheon 13, Sinseol 1, Yongdu 1-6, Gangbuk 5, and Heukseok 2.

Deputy Prime Minister Hong said, "Since each candidate site is located in transit station areas where high-density development is possible, if developed as planned, an additional supply of 4,700 housing units will be realized within central Seoul."

◆ 3 trillion won support for ventures and startups = The government will provide 3 trillion won in complex financing to 3,000 ventures and startups and expand overseas orders in green energy and other sectors to 30GW by 2025. Over the next five years, 30 trillion won in export financing will be supplied for the Green New Deal and related initiatives.

At the Emergency Economic Central Countermeasures Headquarters (Economic Central Headquarters) meeting and Korean New Deal ministerial meeting held at the Government Seoul Office on the 13th, Deputy Prime Minister Hong stated, "To resolve difficulties faced by companies without collateral excluding intangible assets such as technology, we will expand complex financing linked with investment, loans, and guarantees to the scale of 3 trillion won by next year."

He added, "By supplying funds to about 3,000 ventures and startups, it is expected to create approximately 20,000 jobs."

Regarding the globalization strategy of the Korean New Deal, he said, "In the Green New Deal sector, we will make every effort to expand overseas orders in green energy from 15GW in 2019 to 30GW by 2025." Export financing of 30 trillion won will be supplied for the Green New Deal over five years.