Ex­perts skep­ti­cal over gov’t anti-spec­u­la­tion mea­sures

The Korea Times - - FINANCE - By Jhoo Dong-chan [email protected]­re­atimes.co.kr

The govern­ment in­tro­duced a mea­sure to cap pre­sale prices of pri­vately built apart­ments in 27 neigh­bor­hoods around Seoul, Wed­nes­day, but ex­perts re­main skep­ti­cal of the ef­forts.

They even claimed the move could dis­cour­age de­mand for re­con­struc­tion to choke off the hous­ing sup­ply, even­tu­ally hik­ing hous­ing prices in Seoul.

“The govern­ment be­lieves the move is ex­pected to help curb a rise in Seoul’s hous­ing prices by up to 20 per­cent, but I do not agree with the govern­ment’s op­ti­mism,” said a Lotte real es­tate agency bro­ker sur­named Nam. Nam’s agency is also lo­cated in Seo­cho-gu, one of the dis­tricts af­fected by the govern­ment mea­sure.

“Peo­ple want to live in Gang­namgu or Seo­cho-gu no mat­ter how ex­pen­sive the area is. There will be less con­struc­tion due to the mea­sure. This will choke off the new hous­ing sup­ply in the area. The mea­sure will rather raise hous­ing prices here.”

On Nov. 6, the Min­istry of Land, In­fra­struc­ture and Trans­port an­nounced it has des­ig­nated 27 Seoul neigh­bor­hoods lo­cated in five dis­tricts south of the river, in­clud­ing af­flu­ent Gang­nam-gu and Seo­cho-gu, and three north of the river, as tar­get ar­eas to im­ple­ment a “pre­sale price cap sys­tem” for apart­ments to be built by pri­vate builders amid signs of es­ca­lat­ing hous­ing prices.

“De­mand for new homes in Seoul has risen sharply due to record-low in­ter­est rates and am­ple liq­uid­ity in the mar­kets. Pre­sale prices of newly built apart­ments jumped four times higher than those of ex­ist­ing homes,” Land Min­is­ter Kim Hyun­mee said dur­ing the hous­ing pol­icy re­view com­mit­tee ses­sion at the Se­jong Govern­ment Com­plex, Wed­nes­day.

“The govern­ment will be closely mon­i­tor­ing un­des­ig­nated dis­tricts es­pe­cially in metropoli­tan ar­eas. It will ad­di­tion­ally ap­ply the sys­tem to ar­eas that show any signs of volatil­ity.”

Mo­bile real es­tate app Zig­bang’s big data di­vi­sion head Ham Young-jin also claimed the ef­fect will be tem­po­rary.

“The govern­ment in­tro­duced a sim­i­lar mea­sure across the coun­try in 2007. This time, the mea­sure is im­ple­mented only in 27 parts of Seoul. More peo­ple will rush to the 27 neigh­bor­hoods thanks to the lower pre­sale prices there,” He said.

“Hous­ing prices in ar­eas neigh­bor­ing the 27 neigh­bor­hoods, such as Gwacheon, south of Seoul, could also surge in the short run. The im­pact could be dif­fer­ent from the govern­ment’s ex­pec­ta­tion.”

Ac­cord­ing to the Korea Ap­praisal Board, Seoul’s hous­ing prices have con­tinue their up­trend over the past two months.


Land Min­is­ter Kim Hyun-mee, right, speaks dur­ing the hous­ing pol­icy re­view com­mit­tee ses­sion at the Se­jong Govern­ment Com­plex, Wed­nes­day.

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