Kim Hyun-mi: "Laws and Systems to Prevent Speculation Must Be Established Before Supply"... Ruling Party Accelerates Real Estate Legislation (Comprehensive)

Minister of Land, Infrastructure and Transport Kim Hyun-mi attended the plenary meeting of the National Assembly Land, Infrastructure and Transport Committee on the 28th and is seen talking with Vice Minister Park Seon-ho./Photo by Yoon Dong-ju doso7@

[Asia Economy Reporter Lee Chun-hee] Kim Hyun-mi, Minister of Land, Infrastructure and Transport, presented a plan to propose supply measures only after establishing safeguards through laws and systems to ensure that real estate no longer becomes a target of speculation. The ruling party, the Democratic Party of Korea, is accelerating the legislative process for related regulations in the National Assembly and plans to complete the legislation within this extraordinary session.

On the 28th, at the full meeting of the Land, Infrastructure and Transport Committee held at the National Assembly, Minister Kim, responding to a question from Jin Seong-jun, a Democratic Party lawmaker, asking, "You said the government would research and present housing supply measures by the end of this month; when is the announcement expected?" said, "The bills should be prepared first."

When Jin asked if the intention was to establish safeguards first, Minister Kim replied, "It needs to be clearer institutionally," adding, "I think the supply measures should not become another spark for speculation." This indicates that the government considers the regulatory measures currently being promoted as more urgent.

Based on Minister Kim's remarks, the announcement of the real estate supply measures is expected to be no earlier than next week. Although the government had set a deadline to announce the measures within this month, it is now likely that the measures will be announced after completing the related systems through the July extraordinary session of the National Assembly. The ruling Democratic Party is reportedly planning to handle the currently drafted real estate-related bills through a plenary session on the 4th of next month.

"Complete within the extraordinary session"... Democratic Party speeds up bill processing

On the 28th, a full meeting of the Land, Infrastructure and Transport Committee is being held at the National Assembly in Yeouido, Seoul. [Image source=Yonhap News]

In fact, at the Land, Infrastructure and Transport Committee meeting that day, a large number of bills proposed by ruling party lawmakers were passed. The 'Special Act on Public Housing' and the 'Act on Real Estate Transaction Reporting, etc.' proposed by Representative Park Sang-hyuk, the 'Special Act on Private Rental Housing' proposed by Park Hong-geun and Jin Seong-jun, the 'Act on the Recovery of Excess Profits from Reconstruction' by Kang Jun-hyun, the 'Housing Act' by Yoon Kwan-seok and Lee Won-wook, and the 'Special Act on Vacant Houses and Small-scale Housing Maintenance' by Moon Jeong-bok, among others, all passed the meeting.

During the discussion, Shim Sang-jung, a Justice Party lawmaker, asked Minister Kim for her opinion on the Housing Lease Protection Act. In response to Shim's question that a 9-year lease period should be guaranteed for effective residential stability and that the 5% cap rate is excessively high, Minister Kim said, "If a long-term lease period is guaranteed, it would help tenants," but added, "It would be difficult for landlords in reality," and answered that the currently actively discussed 2+2 year plan is appropriate. Regarding the cap rate, she said, "Life conditions differ by local government," supporting the idea of setting 5% as the cap and allowing each local government to determine the actual cap rate through ordinances.

Minister Kim dismissed concerns about a 'balloon effect' where investment demand would shift to multi-family houses or villas if apartment housing lease businesses were abolished. She said, "When the September 13, 2018 measures were announced, it was already decided not to provide tax benefits for registering as a rental business operator when purchasing new housing in regulated areas," adding, "The benefits given are not large, and price increases are not significant, so I think it is limited for people to enter aiming for capital gains."

Regarding the expansion of the application areas for the private land price ceiling system, she took a cautious stance. In response to Park Sang-hyuk's question about the possibility of expanding the price ceiling system to metropolitan cities such as Sejong and Daegu, where housing prices and pre-sale prices are rising outside the metropolitan area, Minister Kim said, "There are concerns about market instability, and it is appropriate to decide the application areas by comprehensively considering issues such as high pre-sale prices and redevelopment projects," adding, "I will review it once more." She further added, "Each local government has a pre-sale price review committee," through which pre-sale price control is sufficiently possible.

On the social discrimination issue of public rental housing, she also expressed the need to increase construction costs. In response to Moon Jin-seok, a Democratic Party lawmaker, explaining that children living in LH's housing brand 'Humansia' are called 'Huguh' and are bullied, Minister Kim agreed, saying, "I strongly agree with the claim that the quality of public rental housing should be improved," and added, "To build good rental housing, construction costs need to be raised, but these are set by the Ministry of Economy and Finance," and requested lawmakers' cooperation in raising construction costs during next year's budget review process.

Members of the Future United Party Song Eon-seok, Kim Hee-guk, and Kim Eun-hye, belonging to the National Assembly Land, Infrastructure and Transport Committee, condemned the Democratic Party of Korea on the 28th at the National Assembly Communication Office for the legislative schedule and real estate-related bills being submitted to the Land Committee without bipartisan agreement. [Image source=Yonhap News]

The meeting that day was held with all lawmakers from the conservative opposition party, the United Future Party, having left. The United Future Party lawmakers in the Land, Infrastructure and Transport Committee left before the full bill discussion, claiming that the ruling party was forcing unilateral procedural progress. They later held a press conference, accusing the Democratic Party of "ignoring the traditions and customs of the National Assembly and following the Blue House's orders," and "attempting to force the passage of only Democratic Party bills."

Hong: "Supply measures are almost prepared"

Deputy Prime Minister for Economy Hong Nam-ki is attending the plenary session of the Planning and Finance Committee held at the National Assembly on the 28th, responding to questions from lawmakers. Photo by Yoon Dong-joo doso7@

Meanwhile, Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, also attended the full meeting of the Planning and Finance Committee at the National Assembly that day and said, "Although it has not been announced externally, meetings are ongoing," and "We are almost preparing supply measures to present to the public."

However, he said, "We are reviewing supply measures, but it is difficult to disclose the details," warning that revealing the contents could shock the market. Regarding various alternatives currently being actively reviewed, he explained, "Discussions are ongoing on issues such as floor area ratio, height restrictions, and discovering new housing sites."

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