Hong Nam-ki Predicts Housing Price Decline... "Please Make Rational Decisions Rather Than Chasing Buys" (Comprehensive)

Presiding Over the Real Estate Market Inspection Meeting of Relevant Ministers

Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki is delivering opening remarks at the 25th Real Estate Market Inspection Meeting of Related Ministers held at the Government Seoul Office in Jongno-gu, Seoul, on the 30th. Photo by Kim Hyun-min kimhyun81@

[Sejong=Asia Economy Reporter Kim Hyunjung] Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki forecasted a decline in housing prices, mentioning excessive leverage in the real estate market and the possibility of interest rate hikes, urging people not to engage in chasing purchases. He also announced plans to accelerate the designation procedures for 24 candidate sites for urban development projects and to intensify additional crackdowns on market-disturbing activities in the second half of the year.

At a meeting of related ministers to review the real estate market held at the Government Seoul Office, Deputy Prime Minister Hong said, "Participants in the housing market are requested to make market participation and decisions based on accurate information and rational judgment rather than excessive expectations, vague anxieties, or chasing purchases at excessively high prices."

Earlier, he introduced the Bank of Korea’s Financial Stability Report, which analyzed housing prices relative to GDP per capita, emphasizing, "The report analyzed that although there is a short-term rise in housing prices disconnected from income, leverage will increasingly act as a downside risk to housing prices." He added, "In the recent situation of rising household loan interest rates, the implementation of household debt management measures such as the expansion of the debt service ratio (DSR) on a borrower basis starting next month, and the Bank of Korea’s mention of a possible base rate hike within the year, will be factors that slow liquidity inflows into the housing market."

He then announced plans to strengthen urban development projects and supply expansion as part of the 2·4 measures, as well as to reinforce crackdowns on market-disturbing activities in the second half of the year. Deputy Prime Minister Hong explained, "The government will proceed with the designation procedures for planned districts targeting 24 urban development project candidate sites where more than 10% of residents have agreed," adding, "We will follow the procedures as soon as the 2·4 measure-related bills, approved by the National Assembly on the 29th, are enacted in September."

He continued, "Among the 250,000 new public housing units (180,000 in the metropolitan area), 130,000 units (110,000 in the metropolitan area) that have not yet been announced will be sequentially disclosed after the completion of speculative investigations starting in August," and said, "We will also accelerate the discovery of additional housing supply sites, such as urban complex development sites proposed by local governments." Regarding pre-sale applications, he stated, "Starting from July 15, we will begin applications for 4,400 units in Incheon Gyeyang District and Wirye New Town, preparing to supply more than 30,000 units to actual demanders by the end of the year," and added, "To stabilize the monthly rent market, we will secure 38,000 units by the second half of the year and a total of 80,000 units by next year through new purchase agreements for newly built housing and public rental housing, and additionally supply 5,000 rental units for youth."

Regarding crackdowns on market-disturbing activities, he said, "The real estate market is too heavily influenced by speculative market-disturbing activities beyond price determination by supply and demand," and added, "Accordingly, the government has announced its intention to eradicate four major market-disturbing activities and is strongly pushing forward." The four major real estate market-disturbing activities mentioned by Deputy Prime Minister Hong are illegal use of non-public/internal information, price manipulation such as fictitious transactions and false price quotes, illegal brokerage and disturbances such as false contracts, and illegal resale and subscription. He stated, "As we conducted joint inspections on sale complexes in the second half of last year and referred 299 cases of illegal subscriptions for investigation, we plan to conduct comprehensive inspections and crackdowns on the four major market-disturbing activities across ministries in the second half of this year as well," emphasizing, "The government’s policy will is resolute."

He also mentioned strengthening support for low-income and actual demanders and youth-tailored support measures. He said, "We will further strengthen protection for actual demanders by expanding special supply for first-time homebuyers in private housing and raising the support limit for Didimdol loans," and emphasized, "especially for youth, we will focus our efforts on policies to ease housing cost burdens, such as strengthening support for youth-preferred subscription savings accounts and introducing interest-free monthly rent loans (200,000 KRW per month)."

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