Yoon: "Introduction of Government and Local Government Fast Track for Rapid Renovation of Aging Houses"

'Urban Housing Supply Inspection Meeting' Held
"Full-scale Promotion of Redevelopment, Reconstruction, and New:Bill"

President Yoon Suk-yeol is speaking at the Urban Housing Supply Inspection Meeting held on the afternoon of the 8th at the Yongsan Presidential Office building in Seoul. [Image source=Yonhap News]

President Yoon Suk-yeol chaired the 'Urban Housing Supply Inspection Meeting' at the Presidential Office on the afternoon of the 8th, stating, "It is time for the government to actively step up to completely remove incorrect housing regulations and maximize housing supply activation." He noted that recent conditions for housing supply, such as high interest rates and rising construction costs, are challenging, and since there is a time lag due to construction periods, now is the golden time for normalizing the housing market.

The meeting was convened to review the effects of various policies implemented by the government to stabilize the housing market and to discuss the progress of urban housing supply measures such as reconstruction, redevelopment, and the New:Village (New:Vil) projects announced at the 2nd and 21st Public Livelihood Forums held on January 10 and March 19, respectively.

In his opening remarks, President Yoon said, "We must rapidly supply the housing that the people want in the places they desire," adding, "First, we will significantly accelerate the pace of redevelopment and reconstruction, which are key to housing supply within cities." He continued, "It is very important to break down not only the silos within government ministries but also the barriers with local governments to collaborate on redevelopment, reconstruction, and New:Vil projects," emphasizing, "To this end, we will establish a fast-track system for close cooperation between the government and local governments."

He also stated, "The Southwest and Gangbuk area redevelopment projects announced by Seoul City are directly linked to the government's efforts to revitalize redevelopment and reconstruction as well as the New:Vil projects, so we will build a close cooperative system."

He hinted that the New:Vil project, which reorganizes old detached houses and villas into new townhouses and modern villas, will also proceed swiftly. President Yoon said, "Since the Public Livelihood Forum in March, a dedicated team has been established within the Ministry of Land, Infrastructure and Transport, and a briefing session for local governments is planned for April," adding, "We will start a pilot project contest in the second half of the year, reorganize existing urban regeneration projects, and fully implement the project from next year."

President Yoon Suk-yeol is speaking at the Urban Housing Supply Inspection Meeting held on the 8th at the Yongsan Presidential Office Building in Seoul. [Image source=Yonhap News]

President Yoon pointed out that due to flawed real estate policies such as punitive taxation and artificial increases in official property prices, not only homeowners but the entire population, including vulnerable groups, have suffered. In particular, the explosive increase in housing costs has driven young people to despair, causing them to delay marriage and newlyweds to give up having children, creating an endless vicious cycle.

He noted that this reality is also evident in concrete statistical figures. The burden of property holding taxes doubled from 5 trillion won in 2018 to 10 trillion won in 2022, and official prices of apartment complexes increased by 63% during the previous government's five years. The increased holding taxes were ultimately passed on to rent and lease prices, causing a 17.6% surge in jeonse (long-term deposit lease) prices from 2020 to 2021.

He explained that the normalization of real estate policies in the three major areas of housing supply, taxation, and finance since the start of the current government was aimed at correcting these issues. To promote housing supply, all areas except the three Gangnam districts and Yongsan were removed from speculative overheated zones, safety diagnosis criteria for redevelopment and reconstruction were relaxed, and the criteria for reclaiming excess profits from reconstruction were raised, resulting in a significant increase in the number of safety diagnosis approvals and designation of maintenance zones.

In taxation, comprehensive real estate tax rates were lowered, heavy taxation on multiple-homeowners' capital gains was temporarily excluded, monthly rent tax credits were expanded, and the official property price realization rate was restored to the 2020 level, greatly reducing the burden on citizens. In finance, support for youth and newlyweds was expanded through youth housing dream subscription accounts, loans, and newborn special loans.

Regarding the housing market, he diagnosed that while apartment prices in Seoul nearly doubled from May 2017 to April 2022, they have fallen by 14.1% since the current government took office, regaining stability. The price-to-income ratio (PIR), which indicates the burden of purchasing a home relative to annual income, also dropped significantly from 13.4 to 10.7.

President Yoon received a report from Minister of Land, Infrastructure and Transport Park Sang-woo on 'Housing Supply Policies to Alleviate Housing Cost Burdens.' Minister Park stated that to ensure citizens' housing stability, related ministries plan to work as one team to promote urban housing supply activation, rapid maintenance of aging planned cities, early start of New:Vil projects, and expansion of quality rental housing.

In the subsequent discussion, President Yoon exchanged various opinions with experts in housing markets, taxation and finance, urban maintenance, and ministers from related ministries.

Attending the meeting were Deputy Research Fellow Lee Tae-hee from the Construction Industry Research Institute, Senior Real Estate Specialist Kim Hyo-sun from NH Nonghyup, and Deputy Branch Manager Woo Byung-tak from Shinhan Bank. From the government, Minister of the Interior and Safety Lee Sang-min, Minister of Land, Infrastructure and Transport Park Sang-woo, Financial Services Commission Chairman Kim Ju-hyun, and First Vice Minister of Strategy and Finance Kim Byung-hwan participated. From local governments, Seoul Mayor Oh Se-hoon attended, and from the Presidential Office, Chief Secretary Lee Gwan-seop, Policy Chief Seong Tae-yoon, and Senior Secretary for Economic Affairs Park Chun-seop were present.