[Q&A] "Gimpo Housing Prices Not at a Concerning Level... Regulations Will Be Imposed Immediately if Prices Rise"

Q&A with the Ministry of Land, Infrastructure and Transport Housing Policy Officer on the '6·17 Measures'

[Asia Economy Reporter Moon Jiwon] The government announced additional real estate regulatory measures on the 17th to curb soaring housing prices. The newly released '6·17 Measures' are being evaluated as an unprecedentedly strong regulation following the December 16 measures last year. Because of this, many predict that housing prices will temporarily stabilize, but since it is not a fundamental or long-term solution, there are also considerable opinions that it will cause side effects such as the 'balloon effect' once again.

The core of this measure is the new designation of all areas except some natural conservation zones and border areas in the metropolitan area and some eup/myeon areas in Cheongju as regulated areas among Gyeonggi, Incheon, Daejeon, and Cheongju, where housing prices have recently surged sharply.

Along with this, 10 areas in Gyeonggi including Seongnam Sujeong, Suwon, Anyang, Ansan Danwon, Guri, Gunpo, Uiwang, Yongin Suji and Giheung, and Hwaseong Dongtan 2, 3 areas in Incheon including Yeonsu, Namdong, Seo-gu, and 4 areas in Daejeon including Dong, Jung, Seo, and Yuseong districts were designated as speculative overheated districts. As a result, the number of speculative overheated districts increased from 31 to 48, and regulated areas increased from 44 to 69.

Below is a Q&A with Ha Dongsu, Director of Housing Policy at the Ministry of Land, Infrastructure and Transport, regarding the '6·17 Measures.'

▲ Gimpo was excluded from the regulated areas this time. Because of this, there are forecasts that prices in Gimpo may surge due to the balloon effect. What is the reason for its exclusion?

= Based on monitoring the market situation so far, Gimpo was not judged to have a high enough housing price increase rate to be designated as a regulated area. On the other hand, Cheongju recently recorded a very high increase rate, and the proportion of corporate purchases is at an all-time high.

Since statistics show that corporations in the metropolitan area have purchased many houses in Cheongju, it was necessary to respond proactively there. Border areas and natural conservation zones including Gimpo are not currently a major concern, but if the housing market becomes unstable at any time in the future, they can be designated as regulated areas.

▲ If a balloon effect occurs in excluded areas like Gimpo and Paju, what will be done? Could the measures be delayed like in Daejeon?

= I cannot make a prediction on that. If the market becomes unstable even next month, we will strive to designate the area as a regulated zone in a timely manner.

▲ Despite strengthened regulations on Seoul through the December 16 measures last year, housing prices in Seoul continue to rise. What do you think is the cause?

= Overall in Seoul, the housing price increase rate last week was 0.02%. It is not a situation where prices are rising significantly. However, monitoring the recent market situation shows that 'gap investments' and investments through corporations are increasing, so tailored regulations were necessary. The designation of the Jamsil MICE development project and the Yeongdong-daero complex development project site as land transaction permission zones was to preemptively block speculation through cooperation between Seoul City and the Ministry of Land, Infrastructure and Transport.

▲ Recently, prices of mid-to-low priced houses in Seoul have risen significantly rather than high-priced houses. What regulatory measures are there for the rise in mid-to-low priced houses?

= In areas like Geumcheon, Gwanak, and Guro districts in Seoul where mid-to-low priced houses are located, many people feeling anxiety about the future housing market are making gap investments. We are trying to block gap investments through restrictions on jeonse (lease deposit) loans, but it is not reasonable to strengthen regulations on actual demanders purchasing houses. We will continue efforts to identify gap investments by those owning more than one house.

▲ Almost all houses in speculative overheated districts are required to submit a financing plan. Is it correct to view this as a de facto housing transaction permission system?

= Essentially, it is completely different. A transaction permission system requires prior approval from the city/county/district office before a contract is concluded, whereas submitting a financing plan is simply submitting a plan for financing. Since it does not prevent housing transactions in advance, the housing transaction permission system and financing plan submission are entirely different.

▲ A one-house owner who takes out a mortgage loan must dispose of the existing house within six months, but this seems too tight a deadline.

= We investigated about 2,000 cases from two years ago and found that only two people failed to meet the condition (disposal within one month), and most complied. Although there are occasional exceptions, it is generally normal to buy a new house considering one's current situation, so I do not think six months is a short period.

▲ Housing prices in Daejeon started rising two years ago, and prices have risen as much as they can, so now is a somewhat quiet period. Isn't the current measure a belated one?

= I find it hard to agree with the statement that Daejeon has risen as much as it can. Weekly housing price trends in Daejeon still show a high increase rate. There is some regret about not being able to stop it earlier.

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