Designation of Real Estate Regulation Targets Calls for Comprehensive Reassessment

[Asia Economy Reporter Yoo In-ho] As the nationwide real estate market becomes unstable, there are calls for a comprehensive review of the government's designation system for regulated areas. This is because speculation is concentrated in areas excluded from regulation, causing a balloon effect and resulting in confusion.

Recently, a partial amendment to the Housing Act, allowing the subdivision of speculative overheating districts into eup, myeon, and dong units for designation, was passed for this reason.

Earlier, on the afternoon of the 9th, the National Assembly held a plenary session and passed the partial amendment to the Housing Act containing these provisions. This is a substitute bill from the Land, Infrastructure and Transport Committee that merged eight bills proposed by lawmakers Hong Jun-pyo, Yoon Sang-hyun, and Yang Kyung-sook into one.

The amendment clearly stipulates that speculative overheating districts or adjustment target areas can be designated at the city, county, district, or eup, myeon, dong level. The current law does not specify the administrative unit for designating speculative overheating districts and adjustment target areas. However, with this amendment, regulatory areas can be subdivided and designated down to the eup, myeon, dong level.

The amendment also includes provisions such as ▲ allowing areas designated as adjustment target areas to be reviewed every half-year considering changes in housing price stabilization conditions and to be deregulated accordingly, and ▲ imposing a residency obligation within five years on public officials who receive special housing supply in speculative overheating districts within administrative capital cities.

Additionally, a bill to shorten the review period for maintaining speculative overheating districts from the current one year to six months has also been proposed.

Kim Eun-hye, a member of the National Assembly’s Land, Infrastructure and Transport Committee, recently introduced the partial amendment to the Housing Act as the main sponsor. The bill mandates reviewing the maintenance of areas designated as speculative overheating districts every six months and deregulating those where housing prices have stabilized and no longer require such designation.

Currently, the Minister of Land, Infrastructure and Transport or the mayor/governor of a city/province can designate or deregulate areas as speculative overheating districts after deliberation by the Residential Policy Deliberation Committee.

In this regard, the Minister convenes the Residential Policy Deliberation Committee annually to review whether to maintain the designation of speculative overheating districts based on housing price conditions in each area.

However, due to the recent rapid rise in real estate prices, there have been calls to shorten the review cycle of the committee to respond more promptly to the rapidly changing real estate market. Accordingly, Rep. Kim aimed to minimize damage to actual homebuyers by shortening the review cycle for maintaining speculative overheating district designations to six months.

Moreover, following the passage of an amendment last month by the National Assembly’s Land, Infrastructure and Transport Committee requiring biannual reviews of real estate adjustment target areas, there are calls to consider fairness by applying the same to speculative overheating districts.

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