'Lotto Housing Sales' Pushed by COVID-19... Private Land Sale Price Ceiling System Extended 3-Month Grace Period

▲ Dunchon Jugong Apartment in Gangdong-gu, Seoul, currently undergoing demolition.

[Asia Economy Reporter Lee Chun-hee] The impact of the novel coronavirus infection (COVID-19) has extended even to the government's real estate policies. Due to disruptions in the progress of projects subject to the private land price ceiling system expansion grace period caused by the spread of COVID-19, the Ministry of Land, Infrastructure and Transport has made a final decision to extend the grace period.

On the 18th, the Ministry of Land, Infrastructure and Transport announced that it will extend the grace period for the application of the private land price ceiling system for redevelopment and reconstruction associations and housing associations from the existing 6 months to 9 months, an extension of 3 months. Accordingly, the grace period end date, which was April 28, has been changed to July 28. Lee Myung-seop, head of the Housing Policy Division at the Ministry, explained, "Based on the tentative conclusion that the current quarantine trend will likely calm down around the end of April, the extension was made within the minimum necessary scope."

Last October, when the government announced the expansion policy of the private land price ceiling system, it decided to postpone the implementation for 6 months only for reconstruction and redevelopment associations that had already received or applied for management disposition plan approval and housing associations that had applied for project plan approval. These projects must issue a public notice for tenant recruitment for general sales by next month’s 28th to avoid the application of the price ceiling system. However, with this extension of the grace period, these projects can now breathe a sigh of relief.

After the subscription system was transferred to the Korea Real Estate Board's 'Cheongyak Home' in January, subscriptions were halted for a month, and then the COVID-19 outbreak in the following month delayed various sales schedules. The industry expressed concerns that some complexes might not be able to issue tenant recruitment notices by the originally scheduled grace period deadline of April 28.

Moreover, as cluster infections occurred consecutively in Daegu and the metropolitan area, the government and local governments banned meetings such as general assemblies of reconstruction and redevelopment complexes, putting associations in urgent situations. 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 from Gangdong, Eunpyeong, Dongjak, Seocho, and Gangnam districts in 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 represent reconstruction complex associations, also requested an extension of the grace period.

Lee Myung-seop, head of the Housing Policy Division at the Ministry, stated, "With this extension of the grace period, it is now possible to postpone the timing of general assemblies. Even during periods of concern over the spread of COVID-19, if assemblies are forced to proceed, we will review restriction and prohibition measures based on infection prevention laws in cooperation with quarantine authorities and local governments."

Since the Housing Act Enforcement Decree must be revised again by next month’s 28th to extend the grace period, the Ministry plans to take swift action. The Ministry of Land, Infrastructure and Transport plans to announce the draft amendment to the enforcement decree for public comment on the 23rd.

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