[Deputy Editor's Column] Real Estate Investment Fever Unabated Despite Regulations

[Asia Economy Reporter Yoo In-ho] "We were surprised by the number of customers, which exceeded our expectations. Due to the novel coronavirus infection (COVID-19), we could not open the model house, so we had no choice but to introduce a drive-thru, and many customers visited, making it very successful. It seems COVID-19 cannot dampen people's enthusiasm for real estate investment."

This is a message from a sales official at POSCO Construction, which recently became the first in the construction industry to introduce a drive-thru for model houses. Since the 22nd, POSCO Construction has been operating a drive-thru at a parking lot near the model house of 'The Sharp Songdo Centennial' in Songdo, Incheon. It is reported that over 5,000 vehicles visited within five days after the drive-thru opened.

Last week, a new record was set in the history of domestic pre-sale. A total of 264,625 people applied for the non-designated subscription of 'Acro Seoul Forest' in Seongdong-gu, Seoul, held on the 20th.

This number exceeds the total number of applicants in Seoul for an entire year, which is 210,000. For just one 97㎡ B-type unit, as many as 210,585 people applied. The so-called 'Jupjup' non-designated subscription refers to supplying units that have no owners due to contract cancellations or disqualified winners by lottery.

The large number of applicants was because anyone aged 19 or older residing in the metropolitan area could apply regardless of whether they had a subscription savings account. The 'lottery psychology' triggered the subscription frenzy for Acro Seoul Forest.

The real estate investment craze is also evident in the subscription savings account enrollment status. As apartments priced several hundred million won below market value continue to appear, the popularity of subscription savings accounts is soaring.

According to the Korea Real Estate Board, the total number of nationwide housing subscription savings account holders was about 24.32 million as of the end of last month. Compared to 23.75 million at the end of last year, it increased by 570,000 in four months.

Despite the spread of COVID-19, the real estate investment fever in the private sector is not cooling down. This is because even the primal desire to pursue wealth cannot be suppressed.

Nevertheless, the government only tries to suppress it through regulations. As part of promoting public redevelopment, the government announced plans to develop a mini new town with 8,000 households at the Yongsan railroad maintenance depot, but less than a week later, when signs of investment fever appeared, it imposed a prior approval system on land transactions near the Yongsan railroad maintenance depot.

Given this situation, the public's trust in the government's real estate policies inevitably declines. Complaints about official property prices are rapidly increasing every year.

An audit by the Board of Audit and Inspection confirms that there were many deficiencies in the government's process of calculating official prices for land and detached houses.

The government must first restore trust in its policies to achieve the original goal of stabilizing housing prices, whether through regulations or supply via public redevelopment.

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