Kim Hyun-mi "There Will Be Many Good Opportunities... It's Regrettable That People in Their 30s Are 'Yeongkkeul' Buying" (Comprehensive)

Criticism of Panic Buying by People in Their 30s... "Corporations Buying Expensive Properties"
Good Opportunities Expected as Supply Measures Announced
Emphasis on Need for Real Estate Oversight Body... "To Be Promoted Within This Year"
Consideration of "Regulations Based on Actual Residence" for Speculative Foreign Transactions

Minister of Land, Infrastructure and Transport Kim Hyun-mi is responding to questions from lawmakers at the Land, Infrastructure and Transport Committee plenary meeting held at the National Assembly on the morning of the 25th. (Photo by Yonhap News)

[Asia Economy Reporter Moon Jiwon] Kim Hyun-mi, Minister of Land, Infrastructure and Transport, expressed regret over the continued 'panic buying' by people in their 30s following the government's real estate measures announcement, stating, "People in their 30s are taking on properties released by multi-homeowners and corporations by stretching their finances to the limit ('youngkkeun' - pulling together all their resources to buy homes)."

Minister Kim explained that since the government recently announced housing supply measures, if they wait patiently, good opportunities will come for those in their 30s.

On the 25th, during the full meeting of the National Assembly's Land, Infrastructure and Transport Committee, Minister Kim made these remarks while continuing policy Q&A with So Byung-hoon, a member of the Democratic Party of Korea.

When Representative So asked, "Have you heard that rental apartments and other rental housing owned by rental business operators are being transferred to individual ownership?" Minister Kim replied, "Many houses held by multi-homeowners have been traded, and it appears that people in their 30s are buying these properties by stretching their finances to the limit ('youngkkeun'). It is regrettable that people in their 30s are buying properties released by corporations at high prices," she said.

In response, Representative So pointed out, "There is a need for comprehensive management and supervision of such aspects. During this period, innocent individuals might end up holding the peak and suffer at the hands of powerful groups."

According to industry sources, as the government abolished the rental business system and significantly increased tax burdens on multi-homeowners, the number of properties they put on the market has increased. Normally, an increase in market supply would lead to an overall downward trend in prices, but people in their 30s, having witnessed rapid price increases, are rushing to buy these properties at high prices, according to the government explanation.

Minister Kim added, "Even for the 3rd phase new towns, pre-sale will begin next year, and this year alone, plans to supply over 200,000 households have been announced. There will be many good opportunities for those in their 30s."

Need for Real Estate Oversight Organization... Establishment Basis to be Prepared Within This Year

Minister Kim also reiterated her intention to promote the establishment of an oversight organization to prevent market disturbances and illegal activities in the real estate market.

She said, "We are considering revising laws related to real estate market transactions to establish grounds for crackdowns and believe there is a need for an organization that can practically take charge. We plan to discuss this among ministries."

She added, "Currently, the legal framework to regulate market disturbances is insufficient. Since real estate accounts for over 70% of assets in our country, I believe it is necessary to strictly manage the real estate market to protect citizens' assets."

When asked by Representative Jin Sung-jun of the Democratic Party about the timeline for establishing the real estate oversight organization, she replied, "We recognize the need and are preparing. Further inter-ministerial discussions are required. Our goal is to have the legal basis for establishment created within this year."

Minister Kim explained that the effects of the government's recently announced measures will appear in statistics from August onward.

She emphasized, "The effects have been appearing since August after the bill passed the National Assembly, but since it takes about a month for transactions to be reported, the statistics will reflect this only after August."

Minister Kim said, "Recent statistics show a decrease in gap investments and an increase in housing properties being sold by corporations. The July statistics reported in the media reflect transactions before the law passed, so I hope there is no misunderstanding."

Speculative Purchases by Foreigners... Kim Hyun-mi: "Considering Regulations Based on Actual Residence"

Regarding concerns about increasing speculative housing purchases by foreigners, Minister Kim explained that measures imposing regulations based on actual residence status are being considered.

On the same day, Kim Sang-hoon of the United Future Party pointed out, "An investigation into whether foreigners who purchased apartments actually reside there showed that 32.7% of owners do not live in their properties. While our citizens cannot even buy a home due to loan restrictions, foreigners are freely obtaining loans in their home countries and purchasing apartments in Korea."

Minister Kim responded, "We are reviewing various issues including foreigners' actual residence status. However, from 2016 to the first half of this year, the proportion of apartments acquired by foreigners was between 0.6% and 0.8%, with no significant increase recently," she clarified.

She further explained, "Foreigners may have advantages as they are not subject to their home country's bank regulations, but there is also the aspect that we should not discriminate against foreigners."

Representative Kim emphasized, "In Singapore, foreigners face a 20% additional acquisition tax on housing, and in Hong Kong, a 30% tax is imposed if the property is resold within three years. We need to apply stricter standards against foreigners who view our real estate market lightly and cause disturbances."

If the government formulates measures for foreigners, it is expected that they will include imposing additional capital gains taxes if foreigners do not reside in the purchased property for a certain period before resale.

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