No Easing of Real Estate Regulations... Government Says "Speculative Demand Persists, Market Stabilization Will Is Stronger Than Ever"

Kim Yong-beom, 1st Vice Minister of the Ministry of Economy and Finance, Chairs Real Estate Market Inspection Meeting
"Government's Firm Commitment to Stabilizing the Real Estate Market"
Some Expect Regulatory Easing as Recent Price Increases Slow
Government Strongly Refutes and Emphasizes Determination in 'War on Real Estate'

Kim Yong-beom, Vice Minister of Strategy and Finance, is delivering opening remarks while presiding over the 'Real Estate Market Inspection Meeting' held on the 15th at the Government Seoul Office in Gwanghwamun, Seoul.

[Sejong=Asia Economy reporters Kim Hyun-jung and Jang Se-hee] The government announced that it will continue to implement the housing market stabilization measures announced through the comprehensive real estate tax rate increase and the expansion of income tax targets as part of the December 16 measures to curb real estate speculation. As the recent outbreak of the novel coronavirus disease (COVID-19) has caused the upward trend in real estate prices to slow down, expectations both inside and outside the market grew that related regulations might be eased. In response, the government reaffirmed its determination to wage a 'war on real estate.'

On the morning of the 15th, Kim Yong-beom, the 1st Vice Minister of Strategy and Finance, held a 'Real Estate Market Inspection Meeting' at the Government Complex Seoul in Gwanghwamun, Seoul, and in his opening remarks said, "Although the spread of COVID-19 has raised concerns about a contraction in the real economy, leading to a cautious stance in the housing market, market instability factors such as abundant liquidity, low interest rates, and speculative demand exploiting regulatory gaps still remain," adding, "The government's determination to stabilize the real estate market is firm."

Vice Minister Kim emphasized, "Since housing is closely linked to the livelihood of ordinary citizens, it should not become a speculative tool for unearned income," and stated, "We are actively responding to speculative housing transactions by continuing joint investigations with related agencies into abnormal and illegal transactions that disrupt the real estate market."

He particularly reiterated the commitment to suppress speculative demand and expand housing supply focused on actual demanders, as presented in the 'Housing Market Stabilization Measures' announced on December 16 last year. Regarding the government measures announced at that time, five legislative amendments to the Comprehensive Real Estate Tax Act, Income Tax Act, Housing Act, Local Tax Special Cases Act, and Private Rental Housing Special Act have been proposed but have not passed the 20th National Assembly.

Regarding this, Vice Minister Kim said, "To recover unearned income through housing, it is essential to strengthen the housing holding burden in accordance with the principle of fair taxation and to reform capital gains tax centered on actual demanders, which requires amendments to the Comprehensive Real Estate Tax Act and Income Tax Act," and stressed, "The Housing Act aims to establish a fair subscription order by prohibiting subscription for a certain period in case of illegal resale, and the amendments to the Local Tax Special Cases Act and Private Rental Housing Special Act seek to reduce excessive benefits to rental business operators and strengthen their responsibilities."

He continued, "To further solidify the recent stabilization of the housing market and establish protection measures for actual demanders in the housing market, the follow-up legislation of the December 16 measures must be completed promptly," and explained, "Even if the term of the 20th National Assembly ends, we will reintroduce the follow-up legislation of the December 16 measures as originally planned in the 21st National Assembly and strive for its swift passage." He added, "The government's determination to maintain housing market stability and thoroughly protect actual housing demanders is stronger than ever," and "The government will continue to strictly respond to speculation and market disruption acts mediated through housing."

Meanwhile, apartment prices in Seoul, which led the rise in real estate prices, have been falling for seven consecutive weeks. According to the nationwide weekly apartment price trend for the second week of May (as of the 11th) announced by the Korea Real Estate Board the day before, apartment prices in Seoul fell by 0.04% compared to the previous week, marking the seventh consecutive week of decline.

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