Real estate market expected to be stable: minister

By Yoon Ja-young

Minister of Land, Infrastructure and Transport Kang Ho-in

Housing prices are expected to remain stable until the first quarter of the next year. While the government is strengthening restrictions on mortgages, it is also important to sustain the housing market, according to the land minister.

“It seems that there won’t be sudden ups and downs in the real estate market until the first quarter next year. Some show concern over the oversupply of new homes, but there are others who say it won’t be so. We have more time for monitoring the market,” Minister of Land, Infrastructure and Transport Kang Ho-in said in a meeting with the media, Monday.

As around 420,000 new apartments were sold between January and October this year, which is a 47.5 percent increase compared with the same period last year, some analysts have been showing concern that many of them may remain vacant after a couple of years when they will be completely built, pressuring the real estate market. However, Kang said it doesn’t mean there will be an immediate oversupply.

“The construction companies will be controlling supply, taking into account the macro-economy and household debt. The problem will be solved in the market.”

The financial regulator announced on the same day plans to tighten regulations on mortgages on its concern over snowballing household debt. Kang said the land ministry will continue monitoring the market and cooperate with other ministries so that the strengthened restrictions won’t end up dampening the housing market.

“Side effect can arise if the regulator tries to diminish loans too abruptly. Loans should be decreased, but the measure should be accompanied by policies to increase household income,” he added.

Regarding Air Seoul, a low-cost carrier Asiana Airlines plans to launch, Kang gave a positive response. Asiana had submitted its application for a business license of the LCC to the ministry back in October and is waiting for approval.

“The LCC market is growing. Entry of an innovative competitor can be an opportunity leading to another innovation,” the minister said.