Post-Election Real Estate Measures Reinforce Current Policy on Housing Price Stability and Residential Welfare

[Asia Economy Reporter Yoo In-ho] With the 21st general election ending in a landslide victory for the ruling party, the government's real estate policy, which focuses on stabilizing housing prices and residential welfare, is expected to gain even more momentum.

Since real estate policy was one of the main concerns of voters in this election, there is a growing possibility that the Moon Jae-in administration's high-intensity real estate regulations will be maintained or even strengthened.

According to political circles and industry sources on the 16th, the ruling party, the Democratic Party of Korea, plans to actively reflect the pledges made during the election, such as tenant protection measures including the right to renew housing lease contracts and rent caps, as well as expanding housing supply for youth and newlyweds, into government policies.

The Ministry of Land, Infrastructure and Transport, the relevant ministry, also plans to reintroduce the bill to introduce a monthly rent reporting system in the 21st National Assembly if the bill fails to pass in the 20th National Assembly. Along with this, the ruling party and government are expected to prioritize discussions on the amendment to the Comprehensive Real Estate Tax Act, which aims to strengthen the comprehensive real estate tax based on the December 16 real estate measures, at the upcoming extraordinary session of the National Assembly at the end of this month.

For the government's plan to strengthen the comprehensive real estate tax to be implemented from this year, the legislative process must be completed before June 1, the standard date for the property tax base. In this process, there is also a high possibility that the Democratic Party leadership, including Co-Chairman Lee Nak-yeon and Floor Leader Lee In-young, will reflect the 'comprehensive real estate tax relief for single-homeowners' pledge in the amendment bill.

The construction of the 3rd new towns in the metropolitan area, including Goyang Changneung District, which had faced difficulties due to resident opposition, is also expected to accelerate. During the election, the ruling party pledged to supply 100,000 homes for youth and newlyweds, including 50,000 homes in transportation hubs and land development districts of the 3rd new towns in the metropolitan area. Additionally, the price ceiling system for housing sales is expected to proceed as planned.

The grace period for the price ceiling system, originally planned until the end of April, has been extended by three months to the end of July due to the impact of the COVID-19 pandemic. The government intends to fully implement the price ceiling system from the end of July unless there are unexpected developments.

Some predict that the decline in housing prices will accelerate after this general election. Since the government’s high-intensity regulatory real estate policy has gained strength with this election victory, there is a higher likelihood that disappointed multi-homeowners will put their properties on the market.

In the Seoul metropolitan area, including the Gangnam 3 districts and 'Mayongseong' (Mapo, Yongsan, Seongdong districts), as well as areas that experienced a balloon effect such as 'Nodogang' (Nowon, Dobong, Gangbuk districts) and 'Suyongseong' (Suwon, Yongin, Seongnam cities), urgent sale properties have appeared, spreading the downward trend in housing prices.

Park Won-gap, Senior Real Estate Specialist of KB Kookmin Bank Star Advisory Group, forecasted, "A downturn is inevitable until May to June when tax-saving properties due to the postponement of capital gains tax surcharges appear, and depending on economic conditions, a rebound in the second half of the year may be difficult."

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