[Initial Insight] Will the Thirty-Fifth Real Estate Measure Also Be Announced?

[Sejong=Asia Economy Reporter Kim Hyun-jung] The government has announced a real estate policy that is being evaluated as 'unprecedented' in the market. It is also the twenty-second policy announced since the Moon Jae-in administration took office on May 19, 2017. The message each time is concise and consistent. Do not engage in gap investment. Since a house is a place to live, not just to buy, purchasing a home with jeonse deposits to make a profit is a 'social evil' that disrupts the market.

The direction of the announcement is also singular. The money flow (loans) is tightened, and higher taxes are imposed on high-priced or multiple homeowners. Various tax systems are complicated to increase the hassle of buying and selling houses. In musical terms, it is a regulatory crescendo.

So, have the previous policies been effective? Considering that the government's goal is to stabilize the real estate market, or more bluntly, to lower apartment prices in Seoul, the previous twenty-one attempts have failed. The median price of Seoul apartments, which was around 600.625 million KRW in May 2017 when the Moon administration began, rose to 920 million KRW as of May this year, just three years later. The median sale price refers to the price in the middle when sale prices are arranged in order. Looking at areas known as first-class districts, a more realistic understanding is possible. For example, the price of Eunma Apartments (exclusive area 76㎡) in Daechi-dong, Gangnam-gu, Seoul, waiting for reconstruction, rose from 1.2 billion KRW to 1.9 billion KRW during this period, and Acro River Park (exclusive 84㎡) in Banpo-dong, Seocho-gu, known as the most expensive newly built apartment in Korea, soared from the 1.8 billion KRW range to the 2.6 billion KRW range in the same period. Similar changes have appeared in the pre-sale market, where the nationwide private apartment pre-sale price per 3.3㎡, which was 9.84 million KRW, has become 12.1539 million KRW. Narrowing down to Seoul, the pre-sale price per 3.3㎡ reaches 27.07 million KRW.

The problem is that those who bought and sold apartments while prices rose this much mostly acted legally within the bounds of the law. When loan limits decreased, they raised as much capital as possible to buy, and for houses they did not want to sell immediately and did not actually live in, they registered as rental business operators and raised rent only within the prescribed limit (5% per year). Both those who want to increase their assets by buying and selling houses while following the rules and those who do not yet own a house but want to buy in places where prices are expected to rise have become victims of the government's anti-speculation measures. It has reached a ridiculous situation where even Silmi Island, an uninhabited island in Incheon, was designated as a regulated area. Due to the balloon effect caused by the regulatory crescendo, even jeonse prices fluctuated, leading a ruling party lawmaker to bring back a previously proposed amendment to the Housing Lease Protection Act, allowing tenants to demand unlimited contract renewals based on the owner-occupancy rate until 2014, causing a minor commotion.

The 17th, when the real estate policy was announced, was the 1,126th day since the Moon administration took office. Since the policy reached the 22nd announcement during this period, it means a policy was announced every 51 days. President Moon's term ends on May 9, 2022, with 690 days remaining. If the current trend continues, the government could create thirteen more policies before the end of the term, reaching up to the 35th policy. Among real estate brokers, there is even a self-deprecating joke that the expected policy strength toward the end of the administration will be 'imprisonment for gap investment.'

Everyone can dream of a utopian ideal where housing prices stabilize and everyone lives happily together. Everyone also knows that real estate is at the pinnacle of social phenomena such as asset polarization and wealth inheritance. But the world does not work so simply. It is hoped that the 35th real estate policy will not include as targets those with complex hopes like 'buying a house now even if they cannot move in immediately, then paying it off someday by adding saved money and market appreciation to live better.'

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