Oh Se-hoon: "Stabilizing Real Estate through Reconstruction Activation... Strict Punishment for Speculative Acts"

Emergency briefing held at Seoul City Hall on the 29th reveals
Moon Jae-in government suppressed reconstruction, causing Seoul housing prices to surge
Reconstruction and redevelopment activation are key measures to expand supply
However, severe punishment announced for market disruption such as rapid price hikes

Seoul Mayor Oh Se-hoon Photo by Yonhap News

[Asia Economy Reporter Onyu Lim] Seoul Mayor Oh Se-hoon once again emphasized that while revitalizing reconstruction and redevelopment to stabilize the real estate market, he will never tolerate speculative demand disrupting the real estate market.

On the afternoon of the 2nd, Mayor Oh held a briefing at Seoul City Hall to discuss measures for stabilizing the real estate market.

Mayor Oh stated, "Since the inauguration of the Moon Jae-in administration, the real estate policy focused solely on regulations has disrupted supply-demand balance, causing real estate prices to surge rapidly. In Seoul, where there is no land available for large-scale housing development, the only solution is redevelopment and reconstruction."

However, around the time of Mayor Oh’s inauguration, expectations for revitalizing maintenance projects grew, leading to abnormal price surges in various areas, including reconstruction in the Gangnam area.

Mayor Oh emphasized, "We will control the pace of redevelopment and reconstruction and mobilize all possible administrative power to first eradicate disruptive activities in the real estate market." He added, "There will be no realistic compromise that sacrifices Seoul’s future and citizens’ lives. Even if my remaining term is one month instead of one year, I will make the right choice. Speculative demand will be strictly punished as an example."

He also mentioned, "Abnormal cases such as false reporting, merely raising asking prices, and price collusion continue unabated in some reconstruction complexes," and stated plans to prepare strong punitive measures.

He said, "We have already designated land transaction permission zones and are proceeding with proposals to the National Assembly to amend related laws to address loopholes in the effectiveness of these designations." He added, "We will respond strictly and strongly to cases judged as speculative transactions through on-site monitoring and transaction analysis of real estate actual transactions."

Mayor Oh said that actual transaction information is already being monitored and stated, "For cases difficult to judge as normal transactions, we will take all measures to prevent speculation, such as requesting additional evidence submission according to related laws or referring judicial actions to relevant ministries and investigative agencies."

He continued, "Analyzing recent trends shows that major reconstruction complexes are leading the rise in Seoul’s real estate prices, while the price increase rate of newly built apartments under five years old in the four Gangnam districts is quite stable," pointing out that speculative demand is the main cause of recent housing price increases.

Mayor Oh emphasized, "We will aim to stabilize the real estate market through policies expanding supply via normalization of redevelopment and reconstruction, but we will not tolerate the phenomenon where speculative demand targeting gap investments, centered in the redevelopment and reconstruction market, makes the national economy difficult."

He added, "We will provide corresponding incentives to redevelopment and reconstruction areas that respond to the basic principles of fairness and coexistence, but will strictly punish speculative demand as an example."