The government has decided to complete the selection of candidates for a new public housing site within the second quarter of this year, with about 250,000 of the 836,000 households supplied in the second and fourth supply measures. Among them, the total area of new housing sites with 180,000 households to be supplied to the metropolitan area was found to be the same as the sum of five new cities in the third phase. In the real estate market, the Moon Jae-in administration insisted on a negative position on the supply of housing for the past four years, causing a controversy in house prices, but it is positive that the Moon Jae-in administration changed its attitude lately.
However, another concern arises that land compensation for new housing sites that are not properly coordinated may trigger a surge in housing prices in the future. The estimated amount of land compensation for the 3rd new town this year is only 50 trillion won, and if the land compensation procedure is carried out to the new housing site, tens of trillion won will be added. The possibility of picking up real estate in the metropolitan area cannot be ruled out.
On the 17th, Hong Nam-ki, Deputy Prime Minister of Economy and Ministry of Strategy and Finance, said at a meeting of ministers related to real estate market inspection held at the government building in Seoul, “The new public housing area with approximately 250,000 households is thoroughly prepared for details such as demarcation to prevent market confusion. Starting from the beginning, we plan to complete the announcement of the candidate site quickly by the second quarter,” he said. “The government plans to focus all its capabilities on accelerating the execution of the 2·4 supply measures in the future.”
The government plans to create a new public housing site on a scale similar to that of the’third new city’. There are a total of 173,000 households supplied to the existing five 3rd new towns, with a total area of 3274 million m2. The public housing site to be announced this year will be of the’mini new city’ level, which is smaller than that of the third new city, but the overall size is expected to be similar to that of the third new city. On that day, Minister of Land, Infrastructure and Transport Byun Chang-heum said, “We plan to supply new housing sites through the 2nd and 4th measures, and when the total area is combined, it is similar to that of the 3rd new city.” Said.
As the government unveiled its plan to create a new housing site with the total area of the 3rd new city, the mayor’s attention is also focused on the candidate site. Market experts are citing the area of Hwajeon-dong, Deogyang-gu, Goyang-si, Gyeonggi-do, and Gochon-eup, Gimpo-si, as candidate sites, while ranking Gwangmyeong and Siheung districts in Gyeonggi-do as the ‘0’. Experts are paying attention to the land compensation that will be released by the creation of new housing sites. Usually, money in land compensation flows back to real estate investment rather than stocks or financial products. In the real estate industry, the 3rd new cities including Hanam Gyosan (6.7 trillion won), Goyang Changneung (6.3 trillion won), Namyangju Wangsuk (5.7 trillion won), Incheon Gyeyang (1.1 trillion won), and Bucheon Daejang (900 billion won). It is estimated that only compensation for housing site development in each region will exceed 20 trillion won. Considering the cost of creating SOC, it is expected to reach 50 trillion won in land compensation by the end of this year.
Kwon Joo-an, a research fellow at the Korea Institute for Construction Policy, said, “The amount of compensation created through public projects such as new cities will reach 52 trillion won” through the 2021 housing market forecast. Research Fellow Kwon said, “It is estimated that about 22 trillion won will flow into the real estate market. This is a huge scale, which is 22% of 100 trillion won in residential construction investment in 2019.” It is difficult to confirm the specific scale of land compensation for new housing sites as no site has been announced. However, taking into account the publicly announced land price of the standard land and the land price of the metropolitan area, which has risen steeply recently, the possibility of land compensation being released is equal to or higher than that of the 3rd new town. This means that a total of around 100 trillion won in cash can be released on the market. Shin Tae-soo, CEO of land information company Jijon, said, “The most promising candidates, Gwangmyeong and Siheung, Gyeonggi-do, are expected to surpass 6 trillion won even if only 70-80% of the area (17.36 million ㎡) was designated as a new residential area at the time of designation as Bogeumjari housing district. “It was evaluated.
Meanwhile, the government is planning to speed up the work so that there will be no obstacles to implementation in June by submitting a bill related to supply measures to the National Assembly this week and promoting the revision by March. In addition, the urban public housing complex project and the public direct implementation and maintenance project are planned to allow candidate site selection to begin with the enforcement of the law. The government plans to finalize the selection of business sites for 43,000 households in the city center by July this year, and the project sites subject to’cash settlement’, which were controversial during this process, are also expected to emerge.
[손동우 부동산전문기자 / 유준호 기자]
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