'Housing Supply Continues'... Second New Housing Site Announcement This Week

New Land Sites Announced This Week Under 2·4 Measures
Expected to Stabilize Housing Prices by Dispersing Demand in Seoul
However, Concerns Remain as Non-Housing Experts Lead Ministry of Land and LH
Investigation Ongoing into Suspicion of Speculation Cases

Apartment complex viewed from the 63 Square Observatory in Yeongdeungpo-gu, Seoul [Image source=Yonhap News]

[Asia Economy Reporter Moon Jiwon] The government plans to designate new public housing sites for up to 149,000 households this week. With up to 110,000 households expected in the Seoul metropolitan area adjacent to Seoul, market interest is focused. However, since the previously designated Gwangmyeong-Siheung district faced difficulties due to land speculation allegations involving Korea Land and Housing Corporation (LH) employees, and with recent changes in the Ministry of Land, Infrastructure and Transport (MOLIT) and LH leadership to non-housing experts, opinions suggest that the success of the policy remains to be seen.

According to the government on the 26th, MOLIT plans to announce the second phase of new public housing sites, which were previewed in the 2.4 Plan, sometime this week. The announcement is expected to take place on the 28th during the 'Weekly Housing Supply Briefing.' On the 22nd, Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, stated at the Real Estate Market Inspection Ministerial Meeting, "We plan to proceed swiftly with follow-up procedures, including the announcement of additional new housing sites by the end of April."

On February 24th, MOLIT designated three new housing sites in the first phase: Gwangmyeong-Siheung district near Seoul (70,000 households), Busan Daejeo (18,000 households), and Gwangju Sanjeong (13,000 households). Since the total planned new housing sites amount to 180,000 households in the metropolitan area and 70,000 households outside the metropolitan area, the second phase announcement may include up to 110,000 households in the metropolitan area and 39,000 households outside the metropolitan area.

The government is known to have pre-selected candidate sites and conducted preliminary verification regarding unusual transaction trends in those areas and speculation allegations involving public officials such as those from MOLIT. Given the public outrage caused by the revelation that LH employees engaged in pre-speculation worth billions of won in the Gwangmyeong-Siheung district, designated as the 3rd new town, the government intends to thoroughly verify before the announcement to eliminate any grounds for controversy.

For new housing sites in the metropolitan area, Gimpo Gochon, Goyang Daegok-Hwajeong, Hanam Gambuk, and Hwaseong Maesong are being discussed. Due to the intent of the 2.4 Plan, metropolitan area sites must be adjacent to Seoul, have good transportation infrastructure, and secure sufficient supply, so the options are limited. Since Gwangmyeong-Siheung is located in the southwest area, the second phase candidates are likely to be in the southeast, northwest, or northeast areas. Hanam Gambuk is adjacent to Seoul's Songpa and Gangdong districts, and Gimpo Gochon is adjacent to Seoul's Gangseo district.

New housing sites are considered a more certain supply method than public redevelopment or reconstruction, so they are expected to have a significant impact on the market in the future. If the location and transportation are good, they can help stabilize housing prices by dispersing demand from Seoul. In fact, after the first announcement, Seoul apartment prices showed a reduced rate of increase until the election of Seoul Mayor Oh Se-hoon.

However, some argue that announcing additional new housing sites while investigations into speculation allegations involving LH employees are not yet complete is premature. Furthermore, with the recent appointments of non-housing supply experts?Noh Hyung-wook, a former Ministry of Economy and Finance official, as the new MOLIT minister nominee, and Kim Hyun-joon, a former National Tax Service commissioner, as LH president?there are concerns that some adjustments to the 2.4 Plan's direction may cause setbacks.

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