Will the Monopoly in the Housing Sale Guarantee Market be Broken? ... Considering Additional Designations Beyond HUG

[Asia Economy Reporter Moon Jiwon] The Ministry of Land, Infrastructure and Transport has begun reviewing measures to introduce competition into the housing pre-sale guarantee market, which is currently monopolized by the Housing and Urban Guarantee Corporation (HUG).

According to Nara Market and industry sources on the 23rd, the Ministry of Land, Infrastructure and Transport recently commissioned a research project titled "Development Direction of the Housing Pre-sale Guarantee System."

The scope of the research project includes not only the performance and issues of the housing pre-sale guarantee system but also the effects of opening the housing pre-sale guarantee market.

Currently, housing developers such as construction companies must have HUG's pre-sale guarantee to announce recruitment of residents and sell housing units when pre-selling 30 or more units. In other words, HUG, a public corporation under the Ministry of Land, Infrastructure and Transport, monopolizes the housing pre-sale guarantee market.

Therefore, controversies over HUG's monopoly system have arisen for a long time, and in 2017, the Fair Trade Commission requested the Ministry of Land, Infrastructure and Transport to improve the monopoly system by this year.

The housing industry is highly dissatisfied because HUG uses its monopolistic position to arbitrarily delay guarantees and effectively plays a role in controlling pre-sale prices.

The Ministry of Land, Infrastructure and Transport plans to examine what changes would occur in the housing pre-sale and housing pre-sale guarantee sectors if additional housing pre-sale guarantee institutions are designated and the market shifts to an oligopoly, and analyze the advantages, disadvantages, and appropriateness of such changes.

According to the current "Regulations on Housing Supply," housing pre-sale guarantee work can be performed by insurance companies designated by the Minister of Land, Infrastructure and Transport besides HUG, and these insurance companies must be "insurance companies engaged in guarantee insurance." Currently, the only institution meeting these conditions is SGI Seoul Guarantee Insurance.

Since SGI Seoul Guarantee is a private insurance company, if it participates in the housing pre-sale guarantee market, it is expected not to take on the government's role in managing pre-sale prices like HUG.

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