Postponement of the Application of the Price Ceiling System for Sale Caused by COVID-19

Ministry of Land, Infrastructure and Transport to Announce Extension of Private Land Sale Price Ceiling System Grace Period This Week
3-Month Extension Most Likely... Official Letter Sent to KDCA Requesting Response

At the regular general meeting of a redevelopment project site in Seoul held last year, the union members are undergoing the verification process. Photo by Hyunmin Kim kimhyun81@

[Asia Economy Reporter Lee Chun-hee] The novel coronavirus infection (COVID-19) is even obstructing the government's real estate policies. It is reported that the government will announce an extension of the grace period for the expansion of the private land price ceiling system within this week due to the spread of COVID-19.

According to the industry on the 17th, the Ministry of Land, Infrastructure and Transport internally confirmed last week the postponement of the grace period for the private land price ceiling system, considering COVID-19 and other factors, and sent an official letter to related agencies such as the Korea Disease Control and Prevention Agency on the 13th, requesting feedback on the matter. A ministry official said, "We will announce it as soon as possible." It is expected that the finalized details will be announced by the end of this week at the latest.

When the government announced the expansion policy of the private land price ceiling system in October last year, it decided to postpone the implementation for six months only for reconstruction and redevelopment complexes that had already received or applied for management disposition plan approval. These maintenance projects must issue a public notice for recruiting residents for general sale by the 28th of next month to avoid the application of the price ceiling system. However, with this extension of the grace period, these projects can breathe a sigh of relief.

The most likely extension period is three months. In this case, the grace period for the private land price ceiling system will be extended until July 28. Since this requires an amendment to the Enforcement Decree of the Housing Act, the Ministry of Land, Infrastructure and Transport plans to process the amendment on a fast track to complete it within a month.

After the subscription system was transferred to the Korea Real Estate Board's 'Cheongyak Home' in January, subscriptions were halted for a month, and with the COVID-19 outbreak the following month causing various sales schedules to be delayed, the industry feared that some complexes would fail to issue resident recruitment notices by the originally scheduled grace period deadline of April 28.

Moreover, as mass infection incidents occurred consecutively in Daegu and the metropolitan area, the government and local governments banned meetings such as general assemblies of reconstruction and redevelopment complexes, creating an urgent situation. During the 2015 Middle East Respiratory Syndrome (MERS) outbreak, a confirmed patient attended a reconstruction general assembly, resulting in all 1,565 attendees being placed under self-quarantine.

In response, civil complaints requesting the postponement of the price ceiling system implementation were filed in Gangdong, Eunpyeong, Dongjak, Seocho, and Gangnam districts of Seoul. Various construction and housing industry organizations, including the Future City Citizens' Coalition, the Korea Construction Association, the Korea Housing Association, and the Korea Housing Construction Association, which are gatherings of reconstruction complex associations, also requested an extension of the grace period.

This content was produced with the assistance of AI translation services.