Byun Chang-heum also “can’t loosen the reconstruction regulation” Why do you report even if you press hard?[집슐랭]

Minister Byeon Chang-heum “No Reconstruction Regulation Ease”

It seems difficult to ease regulations on reconstruction in this government

Although reconstruction is the main cause of the rise in house prices,

Academia “new construction rather raises the price”

Reconstruction precious body, report one after another

In fact, it is unlikely that the government will ease regulations on reconstruction. The new Minister of Land, Infrastructure and Transport, Byeon Chang-heum, who was in charge of the real estate policy of the late Moon Jae-in administration, is expressing the keynote to expand supply to solve the twisted real estate problem, but is drawing a line to ease the reconstruction regulations, which is considered a reliable supply card. The reconstruction seems to have been branded as’the main culprit of rising house prices’ with multi-homed people in this government. However, experts point out that the causal relationship between reconstruction and apartment prices has been reversed. Rather than raising the price of existing apartments, reconstruction is suppressed, so the price of new apartments rises and the price of reconstruction in the surrounding area increases.

Until the first half of last year, the government did not acknowledge the shortage of supply as the cause of the rise in real estate prices. As a result of speculation by multi-homed people, the government’s policy was based on the judgment that homes for end users were not enough, but that there was no shortage of absolute supply. Since there was no shortage of supply, there was no need to promote redevelopment and reconstruction. Since 2014, the city of Seoul has been pushing for a policy to lift the maintenance zones due to market disturbances by speculators and conflicts with indigenous peoples.

It was last July that the positions of the government and Seoul began to change. After a full-fledged supply discussion took place, the August 2 supply plan was announced. However, there was no card for easing reconstruction at the time. Rather, Minister Kim Hyun-mi drew a line at a briefing on measures to stabilize the housing market on July 10 last year, saying, “I am not thinking about easing reconstruction regulations.” This same position is the same for new Minister Byeon. Minister Byeon presented a supply method utilizing station areas, semi-industrial areas, and low-rise residential areas while emphasizing’quick supply’ at a meeting with housing supply organizations on the 5th. Still, the supply of reconstruction has run out. The logic that there is no shortage of supply means that even if we back down, we do not back down from the position that reconstruction is not allowed.

Will reconstruction regulations raise new construction prices?>

The’side effect of reconstruction’ seen by the government is, in the end, an increase in prices caused by market stimulation. It is a logical structure that if reconstructed apartments are traded at high prices and members set high sales prices to obtain profits, the prices of neighboring apartments also increase.

The Ministry of Land, Infrastructure and Transport announced the implementation of the pre-sale price limit system, and presented an explanation in the related data that “the increase in the sale price of reconstructed apartments → the movement of demand to the existing house → the rise of the existing house → the movement of demand through the sale → the increase in the sale price”. The logic is that the high pre-sale price of reconstruction raises the price of the existing house and the vicious cycle of the increase in the overall house price begins. The government chose a method to regulate reconstruction based on this logic. Typical examples are price management through a ceiling system for pre-sale prices, starting with the recovery of excess profit from reconstruction. In addition, last year’s June 17th measures imposed a requirement to live for two years to qualify as a reconstruction member. Earlier in 2018, the reconstruction safety diagnosis standard was strengthened, making it more difficult to proceed with the reconstruction procedure.

In academia, there is an objection that the predecessor relationship is an incorrect explanation.

Lee Chang-moo, professor of urban engineering at Hanyang University, said, “It is normal for the price of a reconstruction expected apartment to improve qualitatively and increase the equilibrium through reconstruction,” he said. “Thus, rather, the price of a new apartment determines the price level of a reconstructed apartment. It is reasonable.” Professor Yoon Joo-seon of Hongik University Graduate School of Architecture and Urbanism said, “The more reconstruction is suppressed, the higher the demand for existing Gangnam housing, so the structure continues to rise to the price of houses in nearby areas, centering on Gangnam.” “The second, through the activation of redevelopment and reconstruction, By creating a third Gangnam, we can improve the current real estate market structure, where house prices are rising mainly in Gangnam.”

Normally, the maintenance project accounts for more than 70% of the annual supply of new apartments in Seoul. In the 2025 Seoul Housing Comprehensive Plan, out of the planned supply (462,000 to 477,000 households) by 2025, the maintenance project amounted to 339,000 to 354,000 households. This is 73% of the total apartment supply. Reconstruction regulations could give the market a signal that the supply of new apartments in Seoul will soon decrease, as one axis of such a maintenance project is reconstruction. In July 2019, when former Minister of Land, Infrastructure and Transport Kim announced the possibility of expanding the pre-sale price limit, the number of new homes in Seoul skyrocketed.

In fact, it is a concern for housing supply agencies that supply may decrease if reconstruction regulations are strengthened. The Seoul Metropolitan Government also predicted that the strengthening of the standards for reconstruction safety diagnosis implemented in 2018 in the 2025 Comprehensive Housing Plan will have an impact on the supply volume decrease after 2030. Above all, as reconstruction itself has become more precious, prices for reconstruction complexes that have progressed in recent years are rising rapidly. Apgujeong-dong Hanyang 8th dedicated 205㎡ was reported last month for 5.4 billion won. The highest price just before was 4.85 billion won. Professor Lee said, “I should not be swayed by the short-term rise in the price of reconstructed apartments, but should steadily revitalize the maintenance business including reconstruction. Is the only solution.” / Reporter Kim Heung-rok [email protected]

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