Ahn Cheol-soo Criticizes Real Estate Supply Measures Without Location as "Fish-shaped Pastry Without Red Bean Filling" Point by Point

The Government's 25th Real Estate Policy... "Lacking Suitability, Effectiveness, and Sustainability"
"'Real Estate Nationalism' Ignoring the Private Sector"
Ahn Emphasizes "Supplying Housing Where Seoul Citizens Want"

[Asia Economy Reporter Oh Ju-yeon] Ahn Cheol-soo, leader of the People’s Party and candidate for the Seoul mayoral by-election, commented on the government’s 25th real estate policy, saying, "It is positive that they have finally started to address the supply issue, albeit late," but also pointed out that "there are many shortcomings in terms of suitability, feasibility, and sustainability."

[Image source=Yonhap News]

On the 7th, Ahn issued a statement saying, "In the previous 24 real estate policies, the necessity of 'supply' was consistently denied, but now, with only a year and a half left in the term, a seemingly large-scale supply plan has been presented," and criticized, "Housing prices in Seoul nearly doubled over three and a half years, yet there was no proper reflection or apology, and suddenly they unpacked a bundle, talking about a 'supply shock.'"

Ahn pointed out, "From the perspective of Seoul citizens and the public who have suffered from real estate issues, it is positive that the supply problem is being addressed, albeit late, but there are several problems and limitations in this housing policy."

First, he criticized the absence of 'location.'

Ahn said, "It is unclear exactly where the housing will be built," adding, "A real estate supply plan without location is like a fish-shaped bread without red bean filling."

He continued, "They said they would supply housing in various areas through redevelopment, reconstruction, station-area development, semi-industrial zones, and low-density area development, but it is still unclear where and how this will be done," and noted, "Without a clear announcement of locations, panic buying caused by anxiety cannot be calmed."

He also criticized the insistence on 'real estate nationalism' that ignores the private sector, saying, "This cannot be a proper solution."

Ahn emphasized, "This government’s supply plan is also centered on public-led projects," and stated, "Housing construction should basically be led by the private sector and promoted with active participation from residents, which increases participation rates and improves resettlement rates after the project is completed." He explained that if the project is pursued solely by the public sector, the private sector will lose opportunities to participate, making the success of the project itself uncertain.

He also argued that unconditional cash settlements, which would severely shrink transactions, should be reconsidered.

Ahn pointed out, "According to government policy, if real estate acquired after the announcement of this plan is included in public maintenance projects, it will be settled in cash instead of granting priority apartment occupancy rights," and criticized, "Since the timing and location of public maintenance projects are not yet determined, unconditional cash settlements at this point could severely shrink housing transactions."

He added, "Transactions of old buildings will practically stop, and the market for newly built apartments, which cannot be settled in cash, may skyrocket," and criticized, "This misstep came from rushing the supply plan before the Lunar New Year and the election."

In addition, Ahn pointed out that there is no countermeasure for the surge in relocation demand due to development, nor a short-term supply plan through temporary reduction of capital gains tax.

Ahn said, "Furthermore, there is a need to halt the sharp increase in property holding tax that causes a decrease in disposable income and contraction in consumption," and added, "It is necessary to eradicate the practice of misusing tax policy as a subordinate tool of real estate policy."

He stated, "A good policy is one that has suitability, feasibility, and sustainability," and said, "The 25th policy only has the right basic direction but falls short in all three aspects."

He concluded, "I have announced a real estate pledge with the core principle of 'supplying the housing that Seoul citizens want, where they want it,'" and emphasized, "If I become mayor, I will cooperate with the government to correct the various issues I have pointed out."