There is a forecast that the number of unsold houses could exceed 100,000 units within the year. The housing industry has raised claims that measures such as expanding the government’s unsold housing guarantee limit, purchasing unsold houses, and stimulating demand through deregulation of the real estate market are necessary to prevent a hard landing in the real estate market.
On the afternoon of the 28th, at the National Assembly Members' Office Building, Conference Room 1, Yeouido, Seoul, a National Assembly forum on "Measures to Respond to the Housing Market Crisis," hosted by Kim Hak-yong of the People Power Party and sponsored by the Korea Housing Builders Association, was held. Kim Deok-rye, Head of Housing Policy Research at the Korea Housing Institute, is making a presentation. [Photo by Kwak Min-jae]
At the “National Assembly Forum on Housing Market Crisis Response Measures” held on the 28th at the National Assembly Members’ Office Building in Yeouido, Seoul, concerns from the industry and experts about the rapid increase in unsold houses poured out. Kim Deok-rye, head of the Housing Policy Research Office at the Korea Housing Industry Research Institute, who presented on the topic “Housing Market Outlook and Challenges,” said, “As of the end of January, the nationwide number of unsold houses was 75,539 units, and the total volume is at a long-term average level, so the risk is not high. However, if the initial sales rate recently drops significantly, the number of unsold houses is expected to exceed 100,000 units, reaching 125,000 units within the year.” She added, “Considering unreported volumes, the number could increase further, so thorough preemptive measures against the potential risks of unsold houses are necessary.”
Kim Jeong-ju, head of the Economic Finance and Urban Research Office at the Korea Construction Industry Research Institute, stated in his presentation on “Policy Support Measures for a Soft Landing of the Housing Market,” “Since the ‘Legoland incident’ in September last year, the government’s swift market intervention has gradually calmed the possibility of a housing market crisis triggered by financial market instability. However, since the third quarter of last year, the nationwide sales rate has plummeted, and the possibility of normal loan repayments in housing projects has decreased, raising the risk of simultaneous insolvency for developers and construction companies.”
Kim also emphasized the importance of “improving the sales rate” for a soft landing of the housing market and raised the need to strengthen financial procurement support. He suggested, “Currently, the total limit for PF guarantees, which HUG and HF are accepting applications for, is about 20 trillion won, which is not large compared to the market’s potential demand. Therefore, expansion of this limit, supplementary measures to support the liquidity of construction companies, and an expanded role for the government in resolving unsold houses are necessary.”
Following the keynote presentations, the forum entered a full discussion phase, during which appeals from the industry poured out. The forum was chaired by Han Man-hee, former Vice Minister of Land, Infrastructure and Transport, with panelists including Kang Min-seok, head of the Real Estate Research Team at KB Management Research Institute; Park Sun-young, professor of economics at Dongguk University; Cho Young-hoon, CEO of Daekwang ENC; and Jwa Myung-han, team leader of the Housing Policy Division at the Ministry of Land, Infrastructure and Transport.
CEO Cho Young-hoon stated, “If construction companies supply at high prices and unsold houses occur, it could be seen as our responsibility, but many unsold houses are also occurring on land developed by public institutions for new town projects.” He urged, “We ask the government and the National Assembly to take interest, such as by revising the Lease Protection Act so that the private sector can purchase unsold houses.”
Team leader Jwa Myung-han said, “Similar to past financial crises or the IMF period, the speed of increase in unsold houses is rapid, so we are analyzing the current situation from multiple angles, including volume, region, company, apartment size, unsold location, and price range, with maximum vigilance.” He added, “We will respond step by step.”
Meanwhile, the forum was hosted by the office of Kim Hak-yong, a member of the People Power Party, and sponsored by the Korea Housing Builders Association. Former Vice Minister of Land, Infrastructure and Transport Han Man-hee chaired the forum, with senior research fellow Kim Deok-rye of the Korea Housing Industry Research Institute and researcher Kim Jeong-ju of the Korea Construction Industry Research Institute delivering presentations.
On the afternoon of the 28th, at the National Assembly Members' Office Building, Conference Room 1, Yeouido, Seoul, a National Assembly forum on "Housing Market Crisis Response Measures," hosted by Kim Hak-yong of the People Power Party and sponsored by the Korea Housing Builders Association, was held. Kim Hak-yong, Jeong Won-ju, president of the Korea Housing Builders Association, and other attendees are taking a commemorative photo. [Photo by Korea Housing Builders Association]
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