A plan to expand the supply of housing without’substantial’… “Imaginary pregnancy and gonggalpan”

In January 2007, President Roh Moo-hyun, who was in office for the fifth year in office, said in a New Year’s speech, “I am sorry for the confusion because I could not catch (the house price) at once.” As soon as he came to power in 2003, he started a war with real estate, but it was an apology for not catching the house price. Shortly before the apology, they came up with measures to supply large-scale housing. With one year remaining in the regime, it announced that it would supply 1.64 million households by 2010. In the market, controversy over effectiveness and controversy over reality followed.

14 years later, in January 2021, President Moon Jae-in, who has been in office for the fifth year, said in his New Year’s address, “I am very sorry to the people who are discouraged by the difficulties of housing.” Since 2015, the first time in power, he has pledged to catch the house price by pouring out 24 real estate measures, but it was an apology for not catching the house price. And on the 4th, with one year left in office, it announced that it will supply a total of 830,000 households, including 616,000 households in Seoul and the metropolitan area, by 2025. One housing consumer criticized the Internet as “The 2nd and 4th measures are simply’imaginary pregnancy’.”

The Moon Jae-in administration completed the decal comany of the Roh Moo-hyun administration’s real estate countermeasures as a second and fourth measure. Although the order may have changed little by little, it perfectly matches each of the various regulatory measures that were poured out from the early days of power, from one change in regulation to large-scale supply measures with large uncertainties at the end of the regime. It seems that the 2·4 countermeasure was the last puzzle in’Imitate Roh Moo-hyun’.

The two governments focused only on suppressing demand in the early days of power. The market ordered to increase supply but didn’t listen. However, when the price of the house could not be caught, it was nervously at the end of the regime that large-scale supply measures were taken. The Moon administration has secured public housing sites in Newlywed Hope Town since 2018, and announced a plan to supply 300,000 households in the metropolitan area in the September 21 measures that year and announced the third new city. Afterwards, the housing supply continued to increase, and in the May 6 measures last year, a plan to supply 70,000 households in Seoul was proposed, and 132,000 homes were added again through the August 4 measures that year. The total amount of goods released in this way amounts to 1,272,000 households in Seoul and the metropolitan area alone. If the local supply is added, it becomes 1888,000 households, similar to the Roh government. It seems to be a plate to the number. But there is one difference here.

The Roh government’s housing supply measures were still’real’. In the November 15th measures introduced in the second half of 2006, the Roh government increased the supply of new cities such as Gimpo and Paju that were under construction. At that time, 7 large and small new cities (public housing sites) were under development in the metropolitan area alone, so there was no great difficulty in increasing the number. Anyway, there was a substance called a’new city’, but the Moon government is different. There is a third new town, but it has already reached its limit. As a result, most of the numbers are’just words’ that develop the Seoul station area to supply 123,000 households and 136,000 households through public reconstruction. In fact, there was no’homeland’ proposed by the government on this day. As if conscious of this, the government announced on the 4th that, “There are places where consultations with local governments have been completed, and some are under discussions.”

However, it was not specified when it would be revealed. The will of the residents or landlords is important for public reconstruction and development of the station area, but the government said, “The places selected as target sites did not ask for the participation of the actual residents.” It means that they didn’t even ask the residents or landlords,’Would you like to do this?’ A representative of a real estate development company said, “I don’t think anyone will give me rice cakes, but I’m drinking kimchiguk first.”

This is why they are criticized for being’imaginary pregnancy’ or’gonggalpan’ (empty bread) from home consumers. As if conscious of the criticism, Yoon Seong-won, the 1st Vice Minister of the Ministry of Land, Infrastructure and Transport, appeared on CBS Radio on the 5th and insisted that “there are many inquiries from reconstruction associations (related to the 2nd and 4th measures)”. However, it did not reveal which region, which complex it was. Hak-Ryeol Kim, head of the Smart Tube Real Estate Research Institute, said, “If we can’t actually supply such a measure, only the housing consumers who wait for the government’s words will become fools.” “Aside from trust in the government policy, the housing market could fall into greater chaos.” I was concerned.

However, it is not a measure to extinguish the fire in the foot immediately. The housing market is boiling from the beginning of the year to the outskirts of Seoul and the Gangnam area due to the rise of jeonse prices. According to the Seoul Real Estate Information Plaza, the 59m2 for Dong-A 1st apartment in Sindorim, Guro-gu, surpassed 900 million won in the second half of last year, and was recently signed for 1 billion won. This is the first case in which 59㎡ of exclusive use was traded for 1 billion won in Guro-gu. The 21st floor was recently sold for 1.05 billion won. Professor Shim Gyo-eon of Konkuk University’s Department of Real Estate said, “The effect of expanding the supply of housing is highly likely to appear at the time of the move-in.”

The answer can be seen when looking at the time of the Roh government. According to the Korea Real Estate Agency, the Seoul apartment sales price index (2017.11=100) in January 2007 from 83.1 rose to 86.9 at the end of that year. In 2007, an average of 0.5% per month increased, but even the’substantiated’ large-scale supply measures introduced just before did not work at all.

The second and fourth measures have the potential to boost home prices further by encouraging the market. On the 4th, the Citizens’ Alliance for Economic Justice Practices and the Solidarity for Participation were concerned that “the speculation of the planned development site will be polarized.” KB Kookmin Bank’s chief real estate expert Park Won-gap said, “We will not be able to add realistic supply measures right away, and we need to revise and supplement the 2nd Lease Act so that the vicious circle of boosting the house price even now does not continue.”

Reporter Hwang Jung-il [email protected]