'Urban Housing Supply Inspection Meeting' Held
"Full-scale Promotion of Redevelopment, Reconstruction, and New:Ville"
Yoon Orders "Thorough Management of PF Sites with Risk of Failure"
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." Given the recent challenges in housing supply conditions such as high interest rates and rising construction costs, and the time lag due to construction periods, now is considered 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:Vill) projects announced during 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 stated that leading districts will be designated by the end of this year in each local government to proceed with projects more swiftly in the future.
President Yoon also said, "For general redevelopment and reconstruction, we will use standard contracts and dispatch experts to the sites to quickly resolve conflicts over construction costs." He emphasized, "It is very important to break down not only the silos within government ministries but also the walls between local governments to collaborate on redevelopment, reconstruction, and New:Vill projects," adding, "To this end, we will establish a fast-track system for close cooperation between the government and local governments."
He further stated, "The large-scale renovation projects in the southwestern and northern areas of Seoul announced by the Seoul Metropolitan Government are directly linked to the government's efforts to revitalize redevelopment and reconstruction as well as the New:Vill projects, so we will establish a close cooperative system."
He also indicated that the New:Vill project, which reorganizes old detached houses and villas into new townhouses and modern villas, will 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 and, after reorganizing existing urban regeneration projects, will fully implement the project from next year."
President Yoon pointed out that due to past incorrect real estate policies such as punitive taxation and artificial increases in official property prices, not only homeowners but also vulnerable groups and the entire population have experienced hardship. He said, "Through the Public Livelihood Forums, I met 1,813 citizens nationwide and reconfirmed that housing issues are the most important in people's lives," adding, "Due to past wrong real estate policies, the entire nation suffered, and social vulnerable groups including low-income households were hit even harder."
He noted that 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.
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 this reality is also evident through specific statistical figures. The burden of property holding tax doubled from 5 trillion won in 2018 to 10 trillion won in 2022, and the official prices of apartment complexes increased by 63% during the previous government's five years. The increased holding tax was ultimately passed on to rent, causing jeonse (long-term deposit lease) prices to surge by 17.6% from 2020 to 2021.
He explained that the efforts to normalize real estate policies in the three major areas of housing supply, taxation, and finance since the start of the current government were aimed at correcting these issues. To promote housing supply, all areas except the Gangnam 3 districts and Yongsan were removed from the speculative overheated zones, safety inspection standards for redevelopment and reconstruction were relaxed, and the criteria for excess profit recovery in reconstruction were raised, resulting in a significant increase in the number of safety inspections passed and designated maintenance zones.
In the taxation sector, comprehensive real estate tax rates were lowered, heavy taxation on multi-homeowners was temporarily excluded, monthly rent tax credits were expanded, and the realistic rate of official property prices was restored to the 2020 level, significantly reducing the burden on citizens including holding taxes. In finance, support for youth and newlyweds was expanded through the Youth Housing Dream Subscription Savings, loans, and special newborn loans.
Regarding the housing market, 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 housing purchase 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 policies such as revitalizing urban housing supply, rapid maintenance of aging planned cities, early start of New:Vill projects, and expansion of quality rental housing.
During the subsequent discussion, President Yoon exchanged various opinions with experts in housing markets, taxation and finance, urban maintenance, related ministers, and others. Seoul Mayor Oh Se-hoon requested consideration of financial support measures such as project cost loans for redevelopment and reconstruction sites where profitability has declined due to soaring construction costs.
In his closing remarks, President Yoon instructed related ministries to promote policies that enhance predictability of housing prices in the market through meticulous forecasting of mid- to long-term housing demand and stable management of total supply. He also ordered thorough management of project financing (PF) sites with some risk of insolvency and urged everyone to unite their efforts to not miss the golden time for housing stability.
Attending the meeting were Deputy Research Fellow Lee Tae-hee of the Construction Industry Research Institute, Senior Real Estate Researcher Kim Hyo-sun of NH Nonghyup, and Deputy Branch Manager Woo Byung-tak of 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.
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