Deokrye Kim, Director of Jusan-yeon, "Housing Market Regulation Normalization Should Be Phased in 3 Steps for a Smooth Landing"

Attended New Government Strategy Discussion
Not Policy Based on Market Conditions
Urgency and Ease of Institutional Improvement as Criteria
Social Consensus on Housing Supply Shortage
Prioritize Normalization of Regulations as Obstacles

[Asia Economy Reporter Hwang Seoyul] There has been a call to implement a three-phase gradual strategy by the first half of next year to normalize the housing market under the new government. The argument is that policies should be pursued based on the urgency of normalization and ease of institutional improvement, rather than market conditions.

Kim Deokrye, Head of Housing Policy Research at the Korea Research Institute for Human Settlements, stated at the discussion forum titled "Strategies for Normalizing the Housing Market under the New Government," held on the 15th at the National Assembly Members' Office Building in Yeouido, Seoul, that "it is necessary to normalize housing market regulations in three phases." Kim is one of the 15 private experts appointed to the Housing Supply Innovation Committee recently launched by the government to prepare a housing supply roadmap.

The three-phase housing market normalization strategy refers to dividing all measures into three stages based on the urgency of normalization and completing them. Instead of policies that fluctuate according to market conditions due to concerns about rising housing prices, it is preferable to complete them by the first half of next year at the latest, based on whether they involve legislative or administrative matters and the possibility of opposition party cooperation. For example, the strategy for normalizing property tax would proceed in stages: Phase 1 - lowering official property prices, Phase 2 - adjusting tax rates for multiple homeowners, and Phase 3 - integrating property tax and comprehensive real estate tax.

The main contents of each phase include Phase 1 △ exemption from urban redevelopment projects and first-generation new town safety inspections △ realization of standard construction costs for rental housing; Phase 2 △ restoring this year's official housing prices to 2020 levels △ limiting the regions and housing types subject to the rent and lease ceiling system; Phase 3 △ expanding exceptions to the right to request contract renewal.

Kim expressed the view that since there is a certain social consensus on the shortage of housing supply, normalizing regulations that hinder supply should be prioritized. Regarding concerns about price increases in specific complexes due to the easing of safety inspections, Kim explained, "If housing supply normalizes in the long term, prices are likely to stabilize again." On the increased rental burden due to the rise in standard construction costs for rental housing, he responded, "Prices will only adjust if supply exceeds demand unless it is public rental housing," adding, "Since private rental housing cannot be supplied at a loss like public housing, policies are needed to ensure steady supply."

Regarding the three rental laws, he advocated improvement rather than abolition. Although there are clear issues such as market contraction and sharp rent increases, a new order has already been established after two years of implementation, and measures like the rent and lease reporting system have positive effects such as tenant protection and transaction transparency. On specific improvement measures, Kim said, "The regions and housing types subject to the rent and lease ceiling system should be selected in line with the purpose of protecting vulnerable groups," adding, "The system should not apply to rural houses, newly supplied houses, or high-priced jeonse (key money deposit) houses, thereby rationally reducing the target housing."

Regarding the right to request contract renewal, he said, "It is worth considering including exceptions to contract renewal based on complaints that have arisen over the past two years."

Meanwhile, the committee includes Kim, as well as academic figures such as Professor Shim Gyo-eon of Konkuk University, who served as the head of the real estate task force (TF) at the Presidential Transition Committee, Professor Kwon Daejung of Myongji University, Professor Lee Hwasoon of Korea University, and Heo Yoonkyung, Director of Policy Finance Research at the Korea Institute of Construction Industry. Industry figures such as Park Jaehong, Chairman of the Korea Housing Builders Association (CEO of Yeongmu Construction), Choi Kwangho, Senior Vice Chairman of the Korea Housing Association (Vice Chairman and CEO of Hanwha Construction), and Lee Seungmin, Chairman of the Korea Urban Maintenance Association, also participated in large numbers.

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