"If Overheating Concerns Arise, Immediate Regulation Will Begin"... Government Issues Warning Over Overheating in Gimpo and Paju

[Asia Economy Reporter Lee Chun-hee] The government has expressed its intention to impose additional regulations on non-regulated areas, where a balloon effect is reportedly occurring following the June 17 real estate measures.

On the 19th, the Ministry of Land, Infrastructure and Transport stated, "We will do our best to manage the market stably," and added, "If concerns about overheating in the housing market arise in non-regulated areas after the designation of regulated areas, we plan to immediately begin designating those areas as regulated."

Through the measures announced on the 17th, most areas in the metropolitan area, as well as Daejeon and Cheongju, were newly included in regulated areas such as adjusted target areas or speculative overheating districts. However, regions adjacent to Seoul, such as Gimpo and Paju, were excluded from regulation due to being 'border areas,' and metropolitan cities like Busan and Gwangju were also excluded. As a result, a balloon effect reportedly occurred in these areas, with asking prices soaring immediately after the regulation announcement. In response, the Ministry of Land, Infrastructure and Transport declared that it would promptly initiate additional regulations if signs of overheating are detected.

Regarding the plan to allow sales only to union members who have resided for more than two years in reconstruction projects, the ministry hinted at the possibility of improvements through investigation. This is because the plan conflicts with the government's previously announced expansion of rental business operators, leading to criticism that it could harm those operators.

The government addressed issues such as the impossibility of actual residence when registering as long-term rental housing by stating, "We will review various cases affected by this measure, including the remaining rental period of rental business operators, after conducting a detailed status survey." However, concerning the two-year mandatory residence regulation itself, the ministry expressed its intention to maintain the regulation, reasoning that most projects have not yet received union establishment approval and that it is expected to take considerable time until union member sales, so most will be able to fulfill the residence period.

Regarding concerns about the contraction of jeonse (long-term deposit lease) housing supply, the ministry actively defended the measures. The Ministry of Land, Infrastructure and Transport stated, "Even if gap investments decrease due to measures such as 'reclaiming jeonse loans when purchasing houses over 300 million won,' the supply of jeonse housing will not decrease," and further predicted, "If there are more cases of sales to buyers who wish to reside, it will contribute to overall stabilization of sale prices."

The ministry also clarified that the current measures are not regulatory policies targeting actual demanders. Even if loan regulations are strengthened by inclusion in regulated areas, if the current actual demander conditions are met, the loan-to-value ratio (LTV) is relaxed by 10 percentage points, and various policy loans support housing stability for low-income groups such as youth and newlyweds.

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