President Moon Jae-in is pointing to a reporter to question during the 2021 New Year press conference held at the Blue House Chunchu Hall on the morning of the 18th. Senior Reporter Tae-Seok Wang
President Moon Jae-in admitted a’mistake’ in the New Year press conference held at the Blue House on the 18th, saying, “We have focused on preventing real estate speculation, but we have not succeeded in stabilizing real estate.” In the New Year’s address on the 11th, he bowed his head again after apologizing that he said, “We are very sorry to the people who are disheartened by the difficulties of housing.”
President Moon cited low interest rates, liquidity released on the market, and an unexpected increase in the number of households, as reasons for the unstable real estate market. President Moon said, “Because the supply of housing was increased compared to the previous government, there was a judgment that it would be sufficient if we cut off speculation well.” Emphasized.
Increasing number of households, unable to rule out policy impact
It is true that the number of households last year increased significantly compared to the previous year. According to the number of resident-registered households by administrative district of the National Statistical Office, the number of households nationwide increased from 2,2481,466 households in 2019 to 23,033,108 households last year, an increase of 611,642 households in one year. This is a significant increase (173,123 households) compared to the 438,519 households that increased from 2018 to 2019. In 2018, 410,96 households increased from the previous year.
In the metropolitan area including Seoul, which is the source of the craze for house prices last year, more than half of the total increase was 320,000 households. It can be interpreted that President Moon interpreted this as “the demand exceeded the quantity of supply predicted by the government, and the shortage of supply in the end encouraged the increase in real estate prices.”
Park Won-gap, a real estate expert at KB Kookmin Bank, said, “Low interest rates and speculation are also a factor due to the unstable house price, but what has been overlooked is the explosive increase in real demand. It is true that it has increased by as much.”
On the other hand, some argue that the influence of the real estate policy, which gives preferential treatment to one house for one household, cannot be excluded. This is because the separation of households can reduce taxes compared to one household and two houses, and in real estate regulated areas, only the head of the household is entitled to the first-order subscription, which is advantageous for subscription. Seo Jin-hyung, chairman of the Korean Real Estate Association, explained, “The increase in the number of households due to the differentiation of households is a social phenomenon, and there is also an aspect of accelerating the increase in the number of households by increasing donations due to the government’s regulation of multi-homeowners.”
Some point out that it is wrong to predict an increase in the number of households. An expert who requested anonymity pointed out, “I set up a real estate policy based on the prediction of the number of households, the housing supply rate, and the self-occupancy rate, etc.,” and said, “The failure to predict the number of households proves that we are not ready.”
President Moon himself expands housing supply
President Moon has pledged to come up with special supply measures before the Lunar New Year holiday to meet the recently increased demand. This is expected to be fully reflected in the ideal supply measures that emphasized the increase in the number of households. In particular, President Moon said, “In a way that further increases public participation, strengthens incentives, and significantly shortens the procedure, it exceeds the level expected by the market through public redevelopment, station area development, and drastic development of new housing sites. We will specifically increase the supply to the extent that it exceeds,” he emphasized.
In line with this, the government is expected to increase the supply of small and medium-sized housing, such as happy housing suitable for one or two households, and through high-density development in the station area. Commissioner Park Won-gap predicted that “The contents of the President’s press conference will give power to the upcoming supply measures by the Ministry of Land, Infrastructure and Transport.”
Kim Ji-seop reporter [email protected]
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