Hong Nam-ki: "Housing Prices Accelerate 'Downward Stabilization'... 488,000 Units Scheduled for Completion This Year" (Update)

The 36th Real Estate Market Inspection Meeting of Relevant Ministers

Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, is speaking while presiding over the 36th Real Estate Market Inspection Meeting of Related Ministers held at the Government Seoul Office Building on the 5th. 2022.1.5 Photo by Yonhap News

[Sejong=Asia Economy Reporter Son Sun-hee] Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, said on the 5th, "The volume of housing scheduled for occupancy this year is 488,000 units, which exceeds the average level," adding, "In particular, we plan to secure 357,000 apartment units, which have high demand, an increase of 35,000 units compared to last year (322,000 units)."

Deputy Prime Minister Hong presided over a meeting of related ministers to review the real estate market at the Government Complex Seoul in the morning and said, "By 2030, 560,000 housing units will be supplied annually, to the extent that some in the market are even concerned about 'oversupply.'"

He stated, "In terms of sales, a total of 460,000 units are scheduled, combining 390,000 units planned for sale this year and 70,000 units for pre-sale, which is more than 30% higher than the average year," and added, "Especially, pre-sale will be conducted with about twice the volume of last year (38,000 units), focusing on preferred locations such as the 3rd New Towns and the Seoul area projects under the 2.4 measures."

Furthermore, he said, "In January, new candidate sites for urban complex projects will be selected and announced, and from February, we will start recruiting pre-sale tenants for a total of 15,000 units in the first quarter, making every effort to ensure that follow-up measures for housing supply continue without interruption."

Regarding recent trends in the real estate market, Deputy Prime Minister Hong evaluated, "The contraction of buying sentiment is spreading sequentially from Seoul to the metropolitan area and nationwide, and the number of local governments experiencing price declines is increasing, showing an accelerating shift toward a downward stabilization trend regardless of region."

He explained, "In Seoul, prices in three districts?Eunpyeong (-0.02%), Gangbuk (-0.02%), and Dobong (-0.01%)?have declined, and 76% of all autonomous districts have entered the price decline warning zone," adding, "Even newly built houses under five years old, which had led price increases until recently, turned to decline in the fourth week of last month."

Regarding the metropolitan area, he said, "Since the second week of last month, the number of districts with price declines surged to 10 within just two weeks, and the price drop from the first week of October to the end of December last year reached -0.30 percentage points, marking the highest level in about three months according to the Korea Real Estate Board statistics." He added, "The Sejong sales price index plummeted by -0.63% in the fourth week of last month, the highest level ever recorded in both public and private statistics, returning all the price increases from last year to the level of one year ago."

Deputy Prime Minister Hong emphasized, "The parts of housing prices that have risen excessively are expected to undergo some adjustment process," and said, "We will consistently maintain and promote policy directions to firmly establish the recent downward stabilization as a trend."

Meanwhile, the government plans to investigate speculative transactions of low-priced housing under 100 million won in the first quarter of this year. The results of the actual transaction investigation, which has been underway since November last year regarding the concentrated purchase of low-priced apartments with official prices under 100 million won by corporations and outsiders, will be announced. Deputy Prime Minister Hong said, "We will respond with a zero-tolerance principle throughout the year to the four major disruptive acts in the real estate market, including the use of insider information and price manipulation."

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