Hong Nam-ki: "Real Estate Uptrend Curbed by 2·4 Measures... Reassessment of Comprehensive Real Estate Tax Needed"

Acting Director Hong Appears in Government Questioning
"Gradual Realization of Officially Announced Prices Is Appropriate"
Comprehensive Real Estate Tax Should Be Examined If It Reflects Only Part of Public Sentiment

Hong Nam-ki, Acting Prime Minister, attended the government-wide economic questioning session held at the National Assembly plenary session on the 20th and responded to questions from Seo Byung-soo, a member of the People Power Party. Photo by Yoon Dong-joo doso7@

[Asia Economy Reporter Hyunju Lee] Hong Nam-ki, Acting Prime Minister and Deputy Prime Minister for Economy, evaluated on the 20th during the government questioning session that the 2·4 real estate measures have contributed to market stabilization, stating, "Looking at market price trends, the rate of increase has significantly slowed down."

When Acting Prime Minister Hong made this remark, Kim Eun-hye, a member of the People Power Party, pointed out, "The slowdown in the upward trend does not mean apartment prices have not risen. I hope you are not implying that the stability means apartment prices have not increased."

Following this, when Representative Kim said, "The official property price has risen at the largest rate in 14 years, nearly quadrupling. There have been quite a few appeals," Hong responded, "We are accepting appeals until the end of April. Some have submitted formal opinions via official documents to district offices, and some have given verbal opinions, but the number is not that large."

Regarding why the official property price has increased, he said, "The realization rate of official prices for public housing is only 70-80% of market prices," adding, "For individual houses, it is 55%." He continued, "Is it right to keep prices that have a gap from the official market price as they are? I believe the government's phased realization is appropriate."

When Representative Kim asked, "Let's see if the official property price is judged objectively and fairly. How many households are surveyed?" Acting Prime Minister Hong replied, "A full survey of 14.21 million people was conducted. It's almost similar to one apartment building with 700-800 households per person. Appraisal staff conducted the survey and consulted expert appraisers to calculate the prices."

Regarding whether property tax imposed on houses under 600 million KRW can be lowered, he said, "It will be lowered. I can provide statistics."

When asked about the sudden change in stance after previously stating that there was no consideration to ease the comprehensive real estate tax criteria two months ago, Acting Prime Minister Hong said, "At that time, I said there was no consideration because the real estate market was very unstable and I was concerned about sending wrong signals to the market. However, during the recent by-elections, there were discussions about the comprehensive real estate tax, and if that reflects some public sentiment, the government judged it necessary to reconsider it in that context."

Regarding the three lease laws, he firmly stated, "There is no intention to readjust them." He explained, "The three lease laws are policies aimed at alleviating difficulties for tenants, and I believe some problems have emerged in the process. No policy can benefit 100% of people. The government will supplement the issues that have arisen, so some institutional improvements will be made."