Changing Real Estate Policy Currents… Are deregulation cards coming out to promote supply?

(Sejong = Yonhap News) Reporter Yoon Jong-seok = Changes in airflow are being observed in the government’s apartment sales price management policy.

The government has maintained a strict pre-sale price control policy because high pre-sale prices have caused the surrounding house prices to rise, and this has disrupted the business schedule of some complexes. It is changing to the tone.

It is observed that the government, which is actively expanding the supply of housing to stabilize the house price, is not drastic easing regulations other than the management of pre-sale prices.

Seoul apartments seen from Seoul 63 Building
Seoul apartments seen from Seoul 63 Building

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According to the housing industry on the 10th, the Seocho-gu Office in Seoul recently approved a pre-sale price of 5,6686,000 won per 3.3m2 for general pre-sale of’Raemian One Bailey’, a reconstruction apartment in Banpo-dong, which is subject to the pre-sale price limit (partial system).

This is an all-time high, but what surprised the housing industry is that the pre-sale price is 15.9% higher than the general pre-sale price (4891 million won per 3.3㎡) previously calculated by the Housing and Urban Guarantee Corporation (HUG).

In the meantime, it is expected that the pre-sale price applied with the pre-sale system will be much lower than the pre-sale price calculated by HUG. The government has also revealed that the introduction of the splitting system will lower the pre-sale price by 5-10% from the price set by HUG.

However, with the case of One Bailey, it comes to a view that both the management of high sales prices and the division system of HUG, which the government has used as a useful tool for managing house prices, have become useless.

However, it is noted that the evaluation of the Ministry of Land, Infrastructure and Transport is not so negative.

An official from the Ministry of Land, Transport and Maritime Affairs said, “Even though the pre-sale price of Won Bailey is at the highest level, it is still 60% lower than the surrounding market price. This is a result that meets the purpose of the division system. said.

Another official said, “The current market’s demand is to provide housing that is cheaper than the market price through the split-off system, but that does not mean that it should not curb or hinder the supply of housing.”

In the meantime, if supply has been suppressed, such as delays in private housing business schedules due to the government’s strong regulations on pre-sale prices, whether it is the management of pre-sale prices or the installment system of HUG, it is a message from multiple Ministry of Land, Infrastructure and Transport officials that it is now time to review them closely. .

HUG’s high pre-sale price calculation method is expected to be revised drastically.

The Ministry of Land, Infrastructure and Transport has already ordered the HUG to review ways to improve the method of calculating high pre-sale prices.

Recently, when Minister Byeon Chang-heum held a meeting with the housing industry, it is a review of the system improvements proposed by the industry, but it is expected that a major operation on the management method of HUG’s high sales price is inevitable in the current Kiryu.

HUG is different in that if the sale price is calculated by comparing it with the sale price of neighboring apartments, the division system is calculated based on the cost of land, basic construction, and addition.

Minister of Land, Infrastructure and Transport Byun Chang-heum greetings the new Minister
Minister of Land, Infrastructure and Transport Byun Chang-heum greetings the new Minister

(Seoul = Yonhap News) Reporter Ha Sa-heon = Minister of Land, Infrastructure and Transport Byun Chang-heum is greeting the new minister at the plenary session of the National Assembly on the 8th. 2021.1.8
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It is analyzed that the reason that the best pre-sale price in One Bailey came out this time was because the housing price in Gangnam increased a lot, so the land price was high, so the housing cost was set a lot, and because it was designated and promoted as a special construction area that encourages creative forms of architecture, it was analyzed that there was a high additional cost. .

At the same time, it is predicted that the Ministry of Land, Infrastructure and Transport will be entering into a prospective review of other regulations to increase the supply of housing in downtown Seoul.

Currently, the Ministry of Land, Infrastructure and Transport has formed a TF to come up with a plan to supply housing to Seoul before the Lunar New Year, and is intensively looking into the overall supply policy.

In addition to the high-density development of station areas, semi-industrial areas, and low-rise residential areas, plans to expand housing by converging maintenance projects with urban regeneration, and ways to revitalize public redevelopment and reconstruction by giving additional incentives are also intensively reviewed.

It is noteworthy whether there can be measures for deregulation, such as easing safety examination requirements for general reconstruction projects or easing the two-year residency obligation for members.

The Ministry of Land, Infrastructure, and Transport is cautious about this.

An official from the Ministry of Land, Infrastructure and Transport said, “We are looking into ways to give more incentives for public redevelopment and reconstruction, but we are not currently considering deregulation for general projects.”

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