Expansion of Land Transaction Permission Zone an "Unavoidable Choice"
Real Estate Market Facing "A Period of Accumulating Price Surge Energy... A Cocktail with a Fuse for a Surge"
"A Time for the Government to Play Its Role"... "Laissez-Faire Is Not Enough"
"All Efforts to Be Focused on Expanding Supply Within the Time Gained by the Measures"
Kim Yongbeom, Chief of Policy Office at the Presidential Office, stated that the expansion of the Land Transaction Permission Zone (LTPZ) under the 10·15 real estate measures recently announced by the government was an unavoidable choice, emphasizing that "extraordinary times require extraordinary responses."
On October 19, through a Facebook post, Kim expressed regret and apology for the inconvenience caused by requiring even genuine buyers to obtain permission. However, he stressed that strong demand-suppression measures are necessary at this time. He explained, "Liquidity expansion, interest rate cuts, financial market recovery, and rising expectations are coinciding, causing funds to move rapidly into real estate," and diagnosed the situation as "a period when clear upward pressure is forming across the Seoul apartment market, accumulating the energy for price increases."
Accordingly, he emphasized that this is the time for the government to play its role. Kim said, "With the impact of real estate project financing (PF) issues combining with supply shocks, the real estate market is like a cocktail with the fuse for a price surge." He added, "There are assessments that the regulatory easing over the past few years has stimulated market expectations and ignited price increases. We must take this as a lesson and respond preemptively."
Regarding the expansion of the permission system to the entire Seoul area, he said, "We deliberated several times but considered the possibility of a balloon effect." Kim noted, "Some argue that the government should not prevent people from buying ultra-high-priced apartments with their own money, but Seoul is a single, concentrated economic zone, and the prices of ultra-high-priced apartments in areas like Cheongdam and Daechi are linked to the prices of mid-tier apartments." He continued, "Because investments by certain groups affect the housing stability of the middle class, a laissez-faire approach alone cannot solve the problem."
He also stressed that there were limits to relying solely on supply. Kim said, "While it is reasonable to point out that increasing supply is necessary and that suppressing demand alone has its limits, at this moment, it is difficult to respond with supply alone." He emphasized, "Supply takes time, and if we fail to properly manage strong demand pressure, we will face painful consequences."
He went on to say that the government and local governments will focus all their efforts on expanding supply within the time gained through the 6·27 and 10·16 measures. Kim stated, "The government, Seoul Metropolitan Government, and Gyeonggi Province must join forces to increase housing supply," and added, "There can be no partisan differences. The key to supply lies with local governments, and cooperation with the central government is essential."
Kim concluded, "We will do our best to ensure that the inconvenience experienced by genuine buyers leads to positive outcomes." He added, "I had promised not to post on Facebook while working, but I inevitably broke that promise this time. The real estate issue remains a difficult one."
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