Lee Jae-myung: "Stabilizing Real Estate Market, Now is the Opportunity"...Proposing Solutions via SNS

[Suwon Ilbo=Park No-hun Reporter] Gyeonggi Province Governor Lee Jae-myung proposed measures including expanding long-term public rental housing and strong regulations on non-residential housing to stabilize the domestic real estate market.

Governor Lee presented these views on the 8th through his SNS post titled 'Real Estate Stabilization.. Strong Regulation of Non-Residential Housing and Expansion of Public Rental Housing are the Only Answer.'

The governor stated, "Surprisingly, the answer is simple. Protect residential housing reasonably and supply affordable, high-quality housing, while imposing strong regulations on non-residential housing through high taxes that make unearned income impossible and deprivation of financial benefits," presenting two solutions.

One is the expansion of long-term public rental housing, and the other is the land transaction permit system targeting foreigners and corporations as a strong regulatory measure for non-residential housing.

After explaining these two approaches, the governor concluded, "If we find solutions to overcome an abnormal market, we must not miss the opportunity. Real estate market normalization, now is the opportunity."

The following is the full text of the governor's SNS post.

<Real Estate Stabilization.. Strong Regulation of Non-Residential Housing and Expansion of Public Rental Housing are the Only Answer>

In the past Joseon Dynasty, hoarding and speculation were prevalent and were strongly regulated. It was the act of hoarding major goods from across the country and selling them at high prices in the market once stocks ran out. The exact same thing is happening now in the Republic of Korea. Recently, apartment prices hit the largest increase in four months, and in Gwacheon area apartment sales of around 1,000 units, 478,000 applicants competed, recording the highest ratio of 1,812 to 1 (average 458 to 1). Real estate speculation is driving non-homeowners into deep suffering.
A society that robs the fruits of others' labor through monopolizing goods rather than through fair compensation or competition has no more hope. South Korea's real estate speculation and unearned income problems are even more serious as they drive citizens, especially young people, to give up on having children and marriage.
However, surprisingly, the answer is simple. Since the market has already reached 100% housing supply rate, stability can be found through appropriate supply and regulation alone. Protect residential housing reasonably and supply affordable, high-quality housing, while implementing strong regulations on non-residential housing through high taxes that make unearned income impossible and deprivation of financial benefits.
First, expansion of long-term public rental housing such as the 'lifetime housing' mentioned by President Moon Jae-in and Gyeonggi Province's 'basic housing.' If high-quality public rental housing is supplied in good locations where the middle class can afford to live and people can live comfortably, there would be no need to incur debt to buy expensive houses, and unnecessary speculation and fear-driven demand would disappear. Singapore, which shares similar conditions with our country, has already proven this.
However, although Gyeonggi Province plans to supply 50% of housing volume in the Third New City as 'basic housing,' regrettably, this volume falls short of stabilizing the real estate market and balancing supply and demand. Supplying middle-class rental housing for lifetime living is also the intention of President Moon Jae-in. We earnestly recommend to the government to expand basic housing.
Second, the land transaction permit system targeting foreigners and corporations as a strong regulatory measure for non-residential housing. According to the Korea Appraisal Board, as of August this year, foreigner and corporate building transactions reached 82,162 cases in the Seoul metropolitan area, and until May, foreign apartment transaction amounts domestically were 1.2539 trillion won (3,514 acquisition cases), an increase of 413.2 billion won (49%) compared to the same period last year. As Gyeonggi Province is currently implementing this but there are concerns about spillover effects in surrounding areas, government review of expanding the land transaction permit system to the Seoul metropolitan area is also necessary.
If we find solutions to overcome an abnormal market, we must not miss the opportunity. Real estate market normalization, now is the opportunity.