[SUNDAY 진단] Drifting real estate supply
“It’s creepy.” Kim Hyun-ah, the National Power Emergency Response Committee, used this expression frequently throughout the interview. When explaining the public-led redevelopment and reconstruction projects, he also expressed that he was “scary” about the supply of the second and fourth measures. The public-led housing supply is that the government will take over the function of the market, so 836,000 households under the 2nd and 4th measures are read as’the presidential election pledge’. I met Kim at the National Assembly on the 15th. I heard the story of real estate policy diagnosed from the perspective of experts, not just the opposition’s offensive.
Real Estate Expert Kim Hyun-ah, former lawmaker
Supply of 830,000 homes without substance
Political policy tailored to the’largest ever’ number
It is just a dream of completion within 5 years of public redevelopment
Concerned about the ‘2nd Yongsan Incident’
Inevitable rise in house and total prices this year
We need to lower the transaction tax to make the market breathe
He is an expert in urban planning and real estate. Commissioner Kim received a doctorate in urban planning and worked at the Korea Institute of Construction Industry from 1995 to 2016 after passing through the Seoul Development Institute (currently the Seoul Institute), dealing with land construction, urban planning, and residential policy issues. He entered the National Assembly as proportional representative of the Saenuri Party (current people’s power) in the 20th general election in 2016. In the 21st general election held last year, he ran for Ilsan New Town (Goyangjeong) and failed, but he is considered the only real estate expert in the political world.
Urban planning and real estate expert Kim Hyun-ah, National Strength Emergency Response Committee, is interviewing JoongAng SUNDAY at the National Assembly on the 15th. He criticized the 2·4 countermeasures, saying, “It is called’housing supply’ for pre-subscription or securing land, but it is called bread after securing only flour. Reporter Jeon Min-gyu
- Immediately after the 2·4 countermeasures, through Facebook, the government criticized the people for cheating.
- “It is called’housing supply’ for pre-subscription or site securing. It is called bread by securing only flour, not bread. It is fooling the people. The 2·4 countermeasures have no real effect. It is close to the policy of a dream, and it is a political policy.”
- What does it mean to be political?
- “The second and fourth measures are the pledge of the presidential election next year. The reason I see it so is because of the numbers. When the existing supply measures are added, there are a little over 2 million households, and the number of 2 million households has a large symbolism. The government should give it the symbol of the largest ever, but we already had the experience of supplying 2 million households in 1989. If we supply 1.5 million households to such a yard, we can’t impress the people as’the largest ever’. That’s why I just matched the numbers like that. However, it is not easy to designate a new housing site within the Moon Jae-in administration’s term of office, let alone the first effort. The government and the ruling party are well aware of this. That’s why I throw the ideal and tell the locals,’You have to choose us to do this.’ It is a well-made pledge that also has an exit strategy of’the reason this is not possible because we have not been chosen’.”
Few people see public reconstruction going well
- Do you think housing supply is going to be poor?
- “Yes. For public reconstruction alone, the government has given quite a bit of incentives, so I firmly believe that the reconstruction association will participate. However, not many people in the market believe that public reconstruction will work well. The same goes for public redevelopment. Knowing the internal circumstances of redevelopment and reconstruction, we are not so optimistic. As our society is rapidly aging, the age of housing consumers is increasing, and the elderly do not want redevelopment and reconstruction. Even if you can make money, you will have to move, and you have to pay an extra share to live with a pension. I hate that, so I have nowhere to go even if I try to liquidate cash (receiving compensation for redevelopment and reconstruction). House prices in Seoul and metropolitan areas and jeonse prices have soared. The government is mistaken that some incentives can solve these complex problems.”
- Wouldn’t it be better if it was public?
- “It is said that the public can do a 13-year redevelopment and reconstruction project in 5 years, but this is only hope. Redevelopment and reconstruction are the things that can stop even if a project is steadily progressing, but if a minor dispute arises. Aren’t there any redevelopment/reconstruction projects that do not have an emergency committee (emergency countermeasure committee)? Even if the public does it, it will be the same. For example, what would happen if the price of a house surged or fell on the contrary? No matter how much the public is leading, if this happens, it has no choice but to stop. Completing the business within five years is just a dream.”
Graphic = Reporter Park Chun-hwan [email protected]
- The development of Dongja-dong sidebangchon in Seoul Station is pushing forward.
- “When I look at Dongja-dong, the’Yongsan Incident’ comes to mind over 10 years ago. What’s different from the Yongsan Incident? If it is different, then the private sector was the subject of development, but now it is public. It means to do real estate socialism.”
On the 5th, the day after the 2nd and 4th measures, the government announced that it would promote 47,000 square meters in Dongja-dong Jikbangchon as a public housing district project. However, the building and land owners here strongly protested, saying, “The government did not consult in advance or collect opinions.” Minister of Land, Infrastructure and Transport Byun Chang-heum said, “We will provide sufficient compensation and persuasion to landlords and landlords.” Are doing.
- Controversy arises such as unconstitutionality or infringement of property rights with each countermeasure.
- “The government thinks everyone will move according to their intended settings, and they think they should. Especially, if you don’t move as intended, you are considered sinful. This is also a characteristic of the movement sphere. Another is the preconceived notion, or belief, that the public is good. Behind that, there is a perception that the private sector has taken over the development interests. This means that only those who live well will live better. However, there are things the public can and cannot do. Isn’t there a situation where the public has no choice but to lead the development because it is a national emergency like war? I don’t know if the land is nationalized like Singapore. It is virtually impossible and should not be done by the government taking ownership of land or property of buildings individually owned by the private sector in this way. Only the title changed from the days of the military dictatorship, I think it is no different. Now the government and the ruling party are people who have achieved social status by resisting military dictatorship, and they learn by fighting, they are doing the same as in the days of military dictatorship.”
- As a result, is the second and fourth measures not helpful in stabilizing house prices?
- “It won’t help much. According to the data from the Seoul Institute, last year, people in their 30s bought the most houses. For those in their thirties, the proportion of butlers has declined since 2017, and it is expected that the price of homes will fall as the Moon Jae-in government entered the country. Then last year, a lot of my homes were set up. This is so-called panic buying (fear buying), but this is not a normal phenomenon. Considering the economic power, you usually need to be in your 40s to buy a house. The government has pulled all the future demands. We need to stop this, but the 2·4 measures seem insufficient.”
It must be solved in conjunction with employment, labor, and education policies
- Do you think the house price will rise again this year?
- “In major cities such as London, Paris and New York, houses are more expensive than ours. However, these countries are worth it. But in Seoul, houses are expensive compared to the value of Seoul. It can be said that there is a bubble, but the government policy keeps going to strange places, so house prices are likely to rise this year. Instability in the rental car market is also likely to lead.”
- What are the necessary actions in the current situation?
- “For housing, unnecessary regulations should be removed to create a climate that allows a new start. And you shouldn’t even do real estate measures. Except for China, which follows us, no other country in the world has come up with real estate measures like us. Real estate policy should be made in a large framework, at the macroeconomic level. Because they are trapped inside the house and see it only as a matter of money or price, they cannot find an answer. This is because the housing problem cannot be solved unless employment, labor, and education policies are brought together. For example, if telecommuting becomes common, it is possible to live a little farther than Seoul, but there are quite a few links that can be solved when combined with employment and labor policies.”
Commissioner Kim emphasized that the transaction tax should be lowered in order to relieve the housing market’s breath. Kim said, “President Moon Jae-in also insisted on strengthening the holding tax and easing the transaction tax, but now he is greedy,” he said. The government thinks of real estate like an ATM. He said, “The acquisition tax should be lowered to a single tax rate, and the transfer tax should go at the normal tax rate (6~45%) like any other income,” he said.
Reporter Hwang Jung-il obidius@@joongang.co.kr