Confidence collapses, inevitable disruption of the 3rd new city and public housing

It is predicted that the Moon Jae-in administration’s development of the third new town will be delayed for a considerable period as suspicions of land speculation in the Gwangmyeong and Siheung new cities spread by employees of the Korea Land and Housing Corporation (LH). Regardless of this controversy, the government is in a position to proceed with the 3rd new city project as planned, but public opinion is spreading over whether it is justifiable to build a new city on a land where employees of public corporations are speculating.

The Ministry of Land, Infrastructure and Transport and LH are currently working on district planning and land compensation to shorten the period of the 3rd new city project. Hanam Gyosan and Incheon Gyeyang started compensation through compensation announcements in August last year, and Goyang Changneung and Bucheon chiefs plan to announce compensation in the first half. However, it is seldom speeding up due to friction in various places over the compensation price. The progress of land compensation in Gyosan, Hanam, which was originally planned to finish land compensation last year, remains at 49%. Incheon Gyeyang is at 44%.

In the Gwacheon district, which was about to start compensation last year, the compensation period was delayed in the first half of this year, but it was recently delayed again in the second half. This is because the appraisal amount conducted by the land owner and the developer each earned more than 10% and entered a reappraisal. In such a situation, a delay in the project seems inevitable due to suspicion of land speculation by LH employees, directly connected to the land compensation problem in the new city. Immediately, the Residents’ Countermeasure Committee of Hanam Gyosan New Town urged on the 4th to stop the compensation procedure entirely until the completion of the total investigation as the government has initiated a thorough investigation into the 3rd new city. On this day, the government organized a joint government investigation team and decided to conduct a thorough investigation into all eight locations, including six new towns in the third phase. Seo Jin-hyung, president of the Korean Real Estate Association (Professor of Kyungin Women’s University), predicted, “If we consider the progress of the investigation after the full investigation, it will be 5 to 6 months later than the original plan, even if we proceed with the land compensation consultation.”

Experts are also voicing that the business should be suspended until the suspicion is resolved, as the 3rd new town subscription is ahead at the end of this year. This is because if the prosecution investigation proceeds after the pre-subscription, the pre-subscription winner may be delayed in moving into the apartment, and other damage may occur. A real estate expert who requested anonymity said, “The reason the Lee Myung-bak administration’s advance reservation (subscription) system failed is because tenants have been delayed after pre-subscription. To avoid repeating the same mistake, we have to stop the business until the suspicion is resolved.” Said.

It is also expected to have an impact on the announcement of the second public housing site according to the second and fourth measures, a large-scale housing supply plan. Minister of Land, Infrastructure and Transport Byun Chang-heum said at the Civil Affairs Division on the 4th that “the announcement of the second public housing addition will be carried out without a hitch,” but it is pointed out that it will not be as easy as the government’s trust fell to the ground. It is also possible that the Moon government’s final real estate policy goal of supplying 2 million homes to catch the house price is also aground. An executive of a real estate development company said, “There has been a precedent that the development of the Daejang district in Seongnam city was canceled due to speculation by public corporations,” and said, “If the investigation reveals suspicion of additional speculation, the development of the project site itself could be stopped.” Residents of Gwangmyeong and Siheung New Towns have also requested the withdrawal of the new city project. Dae-Jung Kwon, professor of the Department of Real Estate at Myongji University, said, “There is a supply-demand imbalance between the supply cliff period due to the decrease in the number of housing licenses and permits since the Moon Jae-in administration and moving into the 3rd new town. It will also deepen,” he predicted.

Reporter Hwang Jeong-il [email protected]