Hong Nam-ki: "Thoroughly Block Excessive Excess Profits in Housing Development... Measures to Be Prepared Within the Year"

National Assembly Planning and Finance Committee National Audit

Deputy Prime Minister for Economy Hong Nam-ki is attending the National Assembly's Public Accounts Committee hearing on the Ministry of Economy and Finance, the Bank of Korea, and others held at the National Assembly on the 21st, responding to questions from lawmakers. Photo by Yoon Dong-joo doso7@

[Asia Economy reporters Son Sun-hee (Sejong) and Kim Dong-pyo] The government announced on the 21st that it plans to introduce institutional improvement measures at the government level as early as next month regarding the so-called 'Daejang-dong incident.' The purpose is to prevent excessive excess profits that go against public sentiment from being concentrated in specific groups in housing development projects and the like. However, concerns have also been raised in the market that if the level of profit recovery is excessively high, it could negatively affect real estate supply by reducing private sector incentives to participate in development.

Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, appeared at the National Assembly's Planning and Finance Committee comprehensive audit that morning and stated in response to a question from Go Yong-jin, a member of the Democratic Party of Korea, regarding the Daejang-dong incident, "Excessive excess profits or unearned income related to housing land development and construction must be thoroughly prevented and blocked." He added, "We will closely consult with related ministries on institutional improvements or countermeasures," and "We will take measures so that related policies can be announced possibly in November or December."

Assemblyman Go pointed out, "The public is outraged that developers are taking astronomical amounts of money, and they lose trust in government policies," emphasizing, "A policy shift is necessary to fundamentally block unearned income generated from land." In particular, he stressed, "Even when places like Hwacheon Daeyu took hundreds of billions, tax investigations were not conducted in a timely manner," and urged, "Please order a strong special tax investigation on this matter as well."

However, there are concerns that if the intensity of development profit recovery is too high, it could negatively impact housing supply in the long term. The private sector's role is essential for smooth land supply, but if profits are excessively restricted, the incentive to participate in development projects itself decreases. An industry insider said, "While some recovery measures can be prepared for excessive profits as a supplementary device, if preemptive standards are strengthened, it may be difficult to proceed with the projects themselves."

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