Supply of 830,000 households nationwide… It’s the largest supply measure ever
Only 300,000 can be realized according to the government’s will
The rest is unknown… Little short-term supply
Seoul apartment complex as viewed from Seoul Sky, Lotte World Tower, Songpa-gu, Seoul. /News 1
“Is this saying that the common people should not live in Seoul from now on?”
Less than a week after the government’s ‘2·4 real estate measures’ was announced, a flaw is being revealed. Although a large-scale supply was announced, there is no supply to come out in the short term. It was said that the private sector offering land or business rights would provide various benefits, but some point out that it is not effective as it is a countermeasure that actually binds the trade. Although the public recommends maintenance projects, there are no measures for rent to cheonsei for relocation demand. There is also a prospect that only the demand for rent to cheonsei will increase as another’hope advisor’.
Taking measures… The supply of public housing in Seoul is ‘0’
On the 4th, the government announced a plan to supply 830,000 households nationwide by 2025, a plan to expand publicly led 3080+ housing supply in metropolitan areas. As President Moon Jae-in announced that it is a’special measure’, it is the largest supply plan for the current government. It plans to build 323,000 households in Seoul with the size of three Bunnean cities, similar to the number of apartments in three districts of Gangnam (Gangnam, Seocho, and Songpa), and supply 616,000 households only in the metropolitan area, including Gyeonggi-do and Incheon (293,000 households). Plan.
With this measure, the government professed the supply of 830,000 homes, and made a self-assessment of the level of’supply shock’. But is it really possible to realize the supply of 830,000 households?
According to the real estate industry on the 10th, in fact, in the second and fourth measures, the amount that can guarantee supply expansion at the will of the government is expected to be limited to 300,000 households. These include supply of housing through new public housing (263,000 households) and volume of new construction purchases (60,000 households). Even so, there is no supply through public housing in the Seoul area.
Excluding the purely public supply, 510,000 households are maintenance projects, high-density development in the station area, semi-industrial areas and small-scale maintenance projects, and urban regeneration maintenance projects. Even if they are led by the public, they are only possible if the private sector participates. This is why the question arises as to whether the government can achieve the maximum amount of supply estimated.
A real estate expert who requested anonymity said, “It is unclear how much participation will increase in the situation where self-regulation of the private sector is required for maintenance projects. The atmosphere is expected to stop,” he said.
The bigger problem is that in the short term, the quantity is at the level of the supply cliff. In this measure, the government announced that the short-term supply that can move in within a few months is only 2000 households this year. There are only 3,000 households next year. It is safe to say that there is little supply in the metropolitan area including Seoul. This year’s regional supply is 900 households in Seoul and 700 households in the metropolitan area, and next year it will only be 1300 households in Seoul and 1,000 households in the metropolitan area.
“For the time being, the common people have no home…
Is there any advantage if the private sector participates in government-led maintenance projects? Landlords participating in public-led projects are exempted from the reconstruction excess profit return system (re-return) and the obligation to live for two years as a member. However, only up to 30% of the profits generated by the increase in floor area ratio and exemption from re-recruitment go to the land owner, and the rest is taken by the public.
In recent years, the housing market has been soaring in apartment prices as long as it is built. In this situation, it is unknown whether it will act as an incentive to attract landlords. Although the residents’ consent rate was lowered to two-thirds, it is a matter of property rights, so it is not easy to collect the will.
Fortunately, even if a large-scale maintenance project is implemented, there are still problems. Most of the supply of this measure is through maintenance projects. It is a method of supplying by destroying existing houses and increasing the number of houses. As many new houses as announced by the government this time can be built, but there are also many houses that are being demolished. Their demand for migration is also expected to be challenging.
A real estate agency in Seoul. /yunhap news
As doubts about the supply effect are growing, and as trading transactions are blocked, concerns about housing insecurity are intensifying. In the second and fourth measures, in order to prevent speculative demand due to favorable development, the government decided not to give priority supply rights to home buyers after the 4th day of the announcement of the measures. In a situation where no specific development area has been announced, restrictions on eligibility for occupancy are enforced as of the date of the announcement of the measures, so if you accidentally buy a villa, such as a multi-family or row house, you may be subject to cash settlement in which only cash based on an appraised price lower than the market price is returned.
Because of this, experts explain that it is becoming difficult for the common people of homeless end users to find not only apartments but also villas. It is said that there is no real residence or investment profits, so no trading can be done. Ham Young-jin, head of Jikbang Big Data Lab, also said, “The purpose of purchasing a villa is usually two things: profit from the maintenance business and the purpose of real residence,” he said. “At the moment, it is difficult to meet any part, so it is urgent to supplement the policy.”
There are also concerns about the jeonse crisis. In a situation where the outline of the government’s supply countermeasures is generally uncertain, even the houses to be bought and sold disappear, and consumers may be concentrated on offers with relatively clear plans. The demand for jeonse due to waiting demand for subscription is bound to be a big variable. Recently, the market has not been able to obtain a full set. The rate of increase in rented apartment prices in Seoul has recorded over 0.10% for 15 consecutive weeks since the fourth week of October last year, and is still maintaining a high trend.
Ahn Hye-won, Hankyung.com reporter [email protected]