By Kim Yoo-chul
Staff Reporter
South Koreans, who voted for Lee Myung-bak in the presidential election, may have been attracted by Lee’s list of pro-business policies, with high hopes that soaring real-estate prices will be stabilized under the new presidency.
Stable real estate prices have been a most urgent issue under the Roh administration. However, a series of ambitious measures including ``half-priced apartments’’ and higher capital gains taxes for those having high-priced homes seem to have failed completely.
Along with a promise to achieve 7 percent annual economic growth, the president-elect pledged to build 500,000 new homes each year in a bid to cool down the local real estate market.
Lee also made a strong pledge to lower the capital gains tax, while giving more incentives to local builders in a plan to supply more homes.
Experts say Lee’s property policy will shift to ``market-oriented’’ and ``more supply’’ from ``controlling demand’’ and ``government regulations’’ while painting a rather positive outlook for stabilizing apartment prices.
``While Lee’s real estate policy is expected to be market-friendly, apartment prices will rise temporarily but will soon stabilize as he focuses on more supply’’ said Park Won-gap, a researcher from Speed Bank, a real estate agency.
``But prices of more expensive mid- and large-sized apartments are expected to rise further, centering around residential areas south of the Han River,’’ he added.
However, experts say Lee’s ambitious $16 billion canal project will be detrimental to achieving the goal as land prices near the canal route will soar.
The project, if realized, would connect Han River and Nakdong River by tunneling 25 kilometers through a mountain and ports to form a new shipping route bisecting the country from northwest to southeast.
Lee’s opponents and some economists cast doubt about the project, citing environmental risks, high construction costs and land price hikes.
``The canal roadmap will be unveiled soon as Lee still sticks with the policy,’’ said Lee Sang-joo, a researcher from Real Estate 114.
``But the focus will be set on places to benefit from the project,’’ he added.