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| Land Minister Won Hee-ryong speaks at a press conference at the Seoul Government Complex in Gwanghwamun, Tuesday. Yonhap |
New measures signal shift toward market-oriented real estate policy
By Lee Kyung-min
The government will supply 2.7 million homes over the next five years, including 1.58 million units in Seoul, Incheon and Gyeonggi Province, to help stabilize housing prices, the finance and land ministries said, Tuesday.
A comprehensive study will be conducted on sustainable and affordable housing for low-income earners, many of whose living arrangements remain extremely vulnerable as evidenced by the recent devastating flood damage to a large number of Seoul's semi-basement dwellings, known as "banjiha" in Korean.
The first housing plan unveiled by the Yoon Suk-yeol administration will be led by the private sector, a marked turn from the previous drive under predecessor Moon Jae-in, who prioritized state-run redevelopment and reconstruction plans.
Equally pursued will be speedy deregulation of overall land and construction requirements. Greater tax deductions will be provided for private builders and developers on their business income, a major incentive for them to become more active in the real estate market. The expansion of tax benefits was introduced for the first time in 17 years since related laws were enacted.
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| An apartment complex in Songpa District, southern Seoul. Yonhap |
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About 500,000 homes will be made available at as low as 70 percent of market price for young people, newlyweds and first-time home buyers in certain regions. These groups will be able to take out a mortgage for 40 years at extra-low borrowing rates.
Of the total, about 3,000 of these homes will be made available in select areas in Goyang, Bucheon and Namyangju in Gyeonggi Province before the year's end.
The living conditions for new satellite metropolitan cities in Gyeonggi Province will be improved, as illustrated by ongoing efforts to expand and strengthen the public transportation system.
Put on hold, however, was the joint push between the land ministry and the Seoul Metropolitan Government to deny permits to use semi-basement flats for residential purposes.
There was a backlash from low-income earners, who said that without a fundamental solution to the lack of affordable housing, flooding-prone semi-basement flats are at least better than low-cost dormitory-style single-room accommodation, or "gosiwon" in Korean.
"We plan to strengthen cooperation to increase the number of rental homes in the city," the two authorities said in a joint statement.
Kwon Dae-jung, a professor of real estate at Myongji University, said the market-oriented policies are a step in the right direction. "It remains to be seen whether the plans will bring the desired outcome."
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