Won Hee-ryong: "If house prices surge rapidly, we can implement tailored regulations again"

CBS Radio 'Kim Hyun-jung's News Show' Interview

[Image source=Yonhap News]

[Asia Economy Reporter Kim Min-young] Won Hee-ryong, Minister of Land, Infrastructure and Transport, stated that he will respond immediately if side effects arise from the comprehensive deregulation of housing-related policies.

In an interview with CBS Radio's 'Kim Hyun-jung's News Show' on the 4th, Minister Won said, "We are accelerating the pace of deregulation, but if side effects occur in the future, we can make fine adjustments at any time." He emphasized, "If a rapid price surge occurs, we can implement tailored regulations at that time when the market is in a healthy condition."

The Ministry of Land, Infrastructure and Transport lifted regulations on all areas except the three Gangnam districts (Gangnam, Seocho, Songpa) and Yongsan-gu in Seoul the day before. Once removed from the regulated areas, heavy taxation on multi-homeowners such as comprehensive real estate tax and capital gains tax disappears, and loan limits such as Loan-to-Value (LTV) ratios are expanded. Minister Won's remarks are interpreted as a warning that if abnormal signs appear in the real estate market due to these strong deregulation measures, the government will tighten regulations again at any time.

Minister Won evaluated this measure as a kind of safety device to prevent the housing market downturn from turning into an economic crisis. He diagnosed, "The process of transactions stopping and house prices falling is too sudden, causing great shock and pain to those who borrowed to buy homes, especially the 'Yeongkkeul' group, and those who are renting with jeonse deposits, as falling house prices make returning the deposits uncertain. This could lead to a burden on the state unrelated directly to housing, potentially escalating to an economic crisis."

He stressed the need for speed control, saying, "Over the past five years, how much fear, despair, and many side effects have arisen in our country as prices rose? When prices surge rapidly and then crash sharply, the country suffers from a chronic illness." He added, "Rather than emergency injections or drastic measures, the government's basic stance should be to guide a soft landing by enabling the market and economic growth to digest this part with an overall healthy constitution."

However, when asked whether the current measures would stop the downward trend in house prices, he evaluated, "Even though regulations have been lifted this time, there are still many heavy sandbags hanging on the market, so transactions will not suddenly revive nor prices suddenly rise."

Regarding the decision to keep the three Gangnam districts and Yongsan-gu regulated until the end, he explained, "We consider speculation and unhealthy practices as abnormal, so what we pursue is normalization, not a return to past speculation. This is not the direction we aim for at all."

Meanwhile, on whether he will run for the leadership of the People Power Party, he drew a clear line, saying, "I do not have the slightest interest or capacity to care about that. There are many tasks to handle right now. I do not have even a moment to turn my attention to running for party leader."