President Moon Jae-in answers questions from reporter Kim Hyeong-ho of the Korea Economic Daily at a New Year’s press conference held at the Blue House Chunchu Hall on the 18th. The press conference was held for the first time in history with the spread of Corona 19 in an online/offline mixed manner. / Reporter Huh Moon-chan [email protected]
It is observed that the government’s plan to expand housing supply, which is being prepared to announce before the Lunar New Year holiday, will include not only the development of downtown Seoul, but also the designation of new housing sites such as the 4th new city. This is because President Moon Jae-in declared on the 18th that “we will come up with special supply measures that far exceed the market’s expectations.”
President Moon affirmed, “I will alleviate the sentiment of market anxiety (over supply shortage) at once.” This is why there is talk about a supply plan that exceeds the’supply of 300,000 households in the metropolitan area’ announced by the government in 2018.
○ Transition from’demand suppression’ to’supply expansion’
President Moon focused on’active supply expansion’ at a New Year’s press conference held online and offline at the Blue House. He expressed regret, saying, “We have focused on suppressing speculation so far, but we have not succeeded in stabilizing the market.” He expressed his intention to focus on supply expansion.
President Moon said, “Because we have increased the supply of housing than the previous government, we decided that if we cut off speculation well, the market would stabilize,” he said.
In addition to the liquidity and low interest rates released on the market, the increase in the number of households was cited as the cause of the real estate market uncertainty. It means that the company focused on supply expansion through designation of the third new city, but failed to account for the increased number of households. President Moon diagnosed, “Despite the trend of population decline, 610,000 households increased last year,” and said, “As single-person households have increased rapidly due to the recent accelerated household division, more housing supply is needed than expected.
However, some point out that this perception is not appropriate. The significant increase in the number of households last year is largely due to the reinforcement of tax regulations, housing donations, panic buying (panic buying), and increased subscription demand. Professor Kwon Dae-jung of the Department of Real Estate at Myongji University pointed out that “a failure in real estate policy led to a rapid increase in household separation last year.”
○ Until the 4th new town… Large-scale supply notice
President Moon suggested three ways to expand supply: △Expand public redevelopment △High-density development in the station area, △Dreave new housing site development.
Public redevelopment refers to a project in which public institutions such as LH (Korea Land and Housing Corporation) and Seoul Housing and Urban Corporation (SH Corporation) participate as co-executors in low-density developed old residential areas. Although it provides benefits such as an increase in floor area ratio and deregulation, it recovers part of the development profits. It was presented for the first time in the ‘5·6 countermeasures’ last year. On the 15th, 8 candidate sites with a size of 4700 households were selected. It is reported that the government will include measures to expand public redevelopment nationwide as a countermeasure before the Lunar New Year.
The high-density development of the station area has been a lot of interest by Minister of Land, Infrastructure and Transport Byun Chang-heum from the days of LH president. Like public redevelopment, it is expected to include incentives such as raising the floor area ratio as a condition for public institutions to enter. Through high-density development in the station area, it is a policy to intensively supply urban housing for one- or two-person households, such as young people and newlyweds.
As President Moon directly ordered’developing new housing sites,’ the 4th new city-level housing site may be newly designated. In September 2018, the government formalized the supply of the 3rd new city through the’Provision to Supply 300,000 Households in the Metropolitan Area’. Although pre-subscription for the 3rd new town has not yet been made, it is observed that the card can be used to build an additional new town to give a clear signal of supply. Through this, it is predicted that this measure will contain megaton-level supply plans of more than 300,000 households.
However, it is known that there are few additional measures to suppress demand in this measure. As President Moon said, “We will maintain the existing speculative deterrence policy,” it is highly likely that existing regulations such as lending will not be relaxed.
Reporter Jinseok Choi/Eunseo Koo [email protected]