Yoon Reaffirms Real Estate Deregulation, Saying "28 Policies Fueled Housing Price Surge"

President-elect Yoon Suk-yeol is delivering a greeting during his visit to the Economic Subcommittee 2 and Ministry of Land, Infrastructure and Transport briefing held at the Presidential Transition Committee in Tongui-dong, Jongno-gu, Seoul, on the afternoon of the 25th.

"Housing policies have been repeated 28 times, but ultimately they fueled a tremendous rise in housing prices. I believe the reason is that these policies ignored the market's natural principles."

President-elect Yoon Suk-yeol reaffirmed his stance on deregulation to resolve real estate issues. He assessed that despite the Moon Jae-in administration announcing real estate measures 28 times to curb housing prices, it instead triggered a surge rather than stabilization. Among experts, the dominant analysis is that punitive taxation targeting multi-homeowners led more to soaring rents than to an increase in housing supply. Additionally, regarding reconstruction and redevelopment, the government's approach focused solely on speculation prevention, which resulted in reduced urban supply and increased upward pressure on housing prices.

On the afternoon of the 25th, Yoon made an unusual direct appearance at the Ministry of Land, Infrastructure and Transport briefing held at the Presidential Transition Committee office in Tongin-dong, Jongno-gu, Seoul. His surprise attendance, which was not previously announced, demonstrated his strong commitment to easing real estate regulations. He stated, "Since buying and selling transactions relate to the market, we need to examine more carefully whether imposing excessive regulations on multi-homeowners is appropriate."

Yoon had pledged to temporarily exclude the application of the capital gains tax surcharge for up to two years and to reconsider the policy of imposing capital gains tax surcharges on multi-homeowners during a comprehensive reform of real estate taxation. He also promised to ease the progressive acquisition tax on multi-homeowners owning two or more houses in regulated areas. Measures such as raising the loan-to-value ratio (LTV) are also under consideration. It was reported that these real estate tax supplementation plans were presented during the Ministry of Strategy and Finance’s briefing to the transition committee the previous day.

Yoon’s criticism that the current administration’s regulation-heavy policies, which ignored market principles, caused the surge in housing prices has been consistent since his candidacy. In fact, from the outset, the current government identified speculative demand from multi-homeowners and corporations as the cause of rising housing prices and focused on suppressing demand through various regulations. On the 25th, Ahn Jong-seok, head of Gaon Tax Policy Research Institute, pointed out at the Korean Public Finance Association’s spring academic conference that "the current real estate tax system, aimed at inducing multi-homeowners to sell their properties, only caused a sharp rise in housing rents without stabilizing housing prices."

Expanding supply is also a core real estate pledge of President-elect Yoon. On the same day, he emphasized, "Fundamentally, it is important that actual market supply matches demand, with properties coming onto the market and new supply being created. To achieve this, deregulation of housing construction must follow, and land supply must be ensured." This sets the expectation for significant easing of regulations related to reconstruction and redevelopment projects.

Regarding reconstruction, the current government significantly tightened the safety inspection standards in 2018, which is the first step in rebuilding aging housing. At that time, the Ministry of Land, Infrastructure and Transport stated, "We aim to prevent social waste caused by reconstruction projects being promoted despite structural safety." They raised the weight of structural safety in safety inspections from 20% to 50%, among other stricter criteria. This led to widespread complaints that reconstruction projects in aging apartment complexes in areas like Nowon-gu and Yangcheon-gu in Seoul were effectively blocked.

President-elect Yoon has already announced plans to ease regulations on reconstruction, redevelopment, and remodeling to enable sufficient private-led housing supply in high-demand urban areas such as Seoul. He also promised to raise the legal floor area ratio cap, which determines the profitability of reconstruction projects, from the current 300% to 500%. Since urban supply expansion measures like increasing the floor area ratio can be implemented through enforcement ordinances and local regulations, relatively swift progress is possible.

It was reported that the Ministry of Land, Infrastructure and Transport’s briefing on the day included a review of these pledges. Additionally, a detailed implementation plan for the flagship pledge of supplying 2.5 million housing units during the term was also presented. Yoon encouraged, saying, "There is great public interest in the direction of the next government’s housing policy," and expressed hope for "beneficial outcomes."

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