Weight in new housing sites for large-scale supply
Focused on volume only, and concerns about public-led limitations
President Moon Jae-in is attending the State Council meeting held at the Blue House on the 19th. yunhap news
The real estate market is fluctuating when President Moon Jae-in emphasized at a New Year’s press conference on the 18th that he will “specially increase the supply of housing beyond the market’s expectations.” The president’s strong will to stabilize the house price has pushed it off and a breakthrough measure comes out. It is a situation in which various scenarios are predicted in anticipation, or a skeptical gaze that it will not be much different from the existing ones coexist.
The key is the content because it is a pre-determined fact that’special measures’ will come out before the Lunar New Year holidays. After the presidential press conference, the government held a joint briefing session with related organizations, saying, “There is no deregulation of the tax and transfer tax,” the only thing left is the supply method. As the President said, if it exceeds expectations, it will be a turning point, but if it does not cause a repercussion, the market stabilization due to soaring house prices will be further distant.
Massive quantity…Are new residential land or use of idle land?
Summarizing the opinions of the real estate industry on the 19th, Seoul, the source of the current house price craze, is unable to keep up with the demand. In addition, as a policy of preferential treatment for one house for one household, the unconventional countermeasure that might come out of the state where the property of multi-homed people is locked is highly likely to supply large-scale housing through the development of new housing sites. President Moon also mentioned “the drastic development of new residential land” the day before.
In this regard, some are paying attention to the lifting of the development restriction zone (green belt). In Seoul, where there is not much available land, it is the opinion that loosening the green belt is most effective in order to quickly and reliably supply land. Naegok-dong, Seocho-gu, Segok-dong, Gangnam-gu, and the vicinity of Suseo Station, which was developed as a Bogeumjari housing district in 2012, are the first choices. However, although the government reviewed it for housing supply in 2018 and last year, it is a stumbling block that the city’s opposition was canceled. Kim Deok-rye, head of the Housing Industry Research Institute’s housing policy division, said, “It will not be easy because the conservation and development logics are in conflict.”
If the green belt is not lifted, designation of a housing site development district near Seoul may also be considered. Gwangmyeong-si and Siheung-si, Gyeonggi-do are mentioned as candidate sites. Both areas were designated as planned districts for Bogeumjari housing in 2010, but development was stopped due to concerns over the economic downturn and oversupply. In addition, military facilities that have long been mentioned as candidates for development, such as the reserve military training center in Naegok-dong in Seoul and the military base near Eunpyeong New Town, are also rising again. Others are speculating on ways to utilize long-term non-executed urban planning facilities such as parks and parking lots, or to further develop areas around the third new city designated in 2018.
The eyes of doubt sung by’number of households and quantity’
While maintaining a policy stance that focuses on suppressing speculation, there are many eyes that are concerned about the dilemma of promoting supply expansion. President Moon found the cause of the housing supply failure in 610,000 households, which increased sharply last year, and emphasized’quantity’ that exceeded expectations, raising skepticism about supply measures.
Last year, the government decided to supply 132,000 households to Seoul and other metropolitan areas through the ‘8·4 supply plan, but this time, as expectations are high, at least this level must be exceeded. What is particularly worrisome in the market is the large increase in volume, but the ratio of rentals to small and medium-sized apartments is increasing. For high-density development, public redevelopment, public reconstruction, and public small-scale public reconstruction, which are currently being promoted by the government as a supply measure, half of the floor area ratio incentives must be donated to public rental housing. Cho Joo-hyun, an emeritus professor at Konkuk University, diagnosed, “The success of special measures depends on how much housing the end users want, rather than filling the quantity with a lease.”
Even if it is an unconventional plan, they point out the limitations of public initiative. A real estate expert who requested anonymity said, “There are private redevelopment and private reconstruction as a quick and easy way to increase supply, and there are tax benefits that open a retreat for multi-homed people. I don’t know why it goes so difficult.”
Kim Ji-seop reporter [email protected]
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