By Kang Hyun-kyung
Staff Reporter
Democratic Party (DP) legislators have called property deregulation measures set forth by the governing Grand National Party (GNP) a plan doomed to fail.
GNP leaders, meanwhile, contended that easing property regulations was the only viable option that can help the economy get out of recession, describing it as a stimulus plan.
As the two sides show sharp differences over the deregulation, a tug of war is expected in the upcoming National Assembly session in February.
Government policymakers are reviewing the plan to ease property regulations, which was prepared by the GNP policy committee.
Policymakers and GNP officials are known to have some common ground in easing regulations in three southern Seoul districts ― Gangnam, Seocho and Songpa ― which realtors call the three epicenters of soaring property prices.
In an effort to curb a negative spillover effect of the housing prices on overall real estate prices in other regions, government officials imposed extra regulations on housing trade in those areas.
The measures include the 40-percent rule of the debt to income ratio, which has applied in the selling and buying of houses worth 600 million won or more in the three districts. Housing trade in other areas has not been subject to the regulation.
In addition to elimination of the regulatory measure in the three districts in Seoul, GNP and government officials are considering exempting a capital gains tax levied on apartments that are up for sale.
They are also reviewing a removal of the price ceiling set forth for apartments that are not publicly funded. The regulatory measure was introduced in 2006 to curb a rise in property prices.
If they are abolished, realtors say, people would be motivated to purchase houses in the wealthy districts.
Ruling and opposition party lawmakers presented opposing views on the effect of the plan.
DP lawmakers said that a possible home-buying rush in the districts would result in property speculation.
Rep. Park Byeong-seug, chief policymaker of the DP, said once deregulation is set in place, it's hard to reverse the plan even when its harmful effects are so severe. So, he said, it's better to leave the current rules intact.
Park Sun-young, spokeswoman of the minor opposition Liberty Forward Party, said housing prices in southern Seoul began to rise after a report that the government may seek deregulation some time after the lunar New Year's holiday.
Earlier, officials at the Ministry of Land, Transport and Maritime Affairs said the government would make a decision on the deregulation after the holiday.
``It's too early to ease the property regulation for the decision could lead to speculation in the end,'' Park said.
Rep. Yim Tae-hee, chief policymaker in the GNP, disagreed with opposition party leaders, saying middle-class homeowners were discouraged from buying extra homes, and they also have no money to fund their investment.
GNP lawmakers say the deregulation is unavoidable in order to boost the economy.