Posted : 2018-01-12 16:01
Updated : 2018-01-12 20:14

Gov't faces uphill battle to curb housing prices

By Jhoo Dong-chan

The government will introduce additional measures to curb housing prices, as the prices in southern Seoul continued to skyrocket despite stern housing price policies introduced Aug. 2. But analysts are skeptical of the efficacy of the government's measures.

On top of a plan to raise property taxes, the authorities have been conducting on-site investigations of property owners suspected of making speculative investments in multiple homes in southern Seoul.

"I believe speculative investments have been behind the soaring housing prices in southern Seoul," Deputy Prime Minister and Finance Minister Kim Dong-yeon said on Thursday during a meeting with other government agencies.

Kim said the authorities will continue the crackdown on speculative investigators.

Kim called for the National Tax Service to investigate owners of multiple houses in the area. If they are found to commit any irregularities such as tax evasion and unlawful property inheritance, they will face punitive measures including possibly criminal investigation by prosecutors.

The Ministry of Land, Infrastructure and Transport also said during a recent press conference that it has decided to increase the apartment supply in the capital.

The ministry has nominated 31 possible areas in Seoul where it will build apartment complexes in the selected areas, it added.

Analysts, however, say these punitive measures won't become fundamental solutions to soaring housing prices.

"Punitive measures cannot be an effective cure. It's like the government has admitted its anti-speculation steps didn't work and it lacks remedies to effectively tackle surging housing prices," Shinhan Bank analyst Ko Jun-seok said.

"The government has run out of options. It can ill-afford to resolve chronic problems of liquidity glut and housing shortage in the area anytime soon."

According to the Korea Appraisal Board, Seoul apartment prices rose 0.98 percent over four weeks between Dec. 11 and Jan. 8. The Aug. 2 measures turned out to be ineffective at least in Seoul.

The government is considering raising property taxes as the last means of stabilizing the prices, but this is likely to come only after the local election in June.

According to Korea Research Institute for Human Settlements, housing prices rose 2.36 percent in Seoul, Incheon, and Gyeonggi Province last year, while rosing a mere 0.68 percent in other regions. Some provinces experienced a plunge. Apartment prices in Seongsan-gu in Changwon, South Gyeongsang Province, dipped around 10 percent last year.

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