As housing prices across Seoul show a rapid increase, the government warned that it would "explore all available policies." This comes just eight days after the new government was launched. Although the real estate policy of Lee Jae-myung's government has yet to take shape, expectations are high that it will focus on a supply-driven real estate policy, rather than regulatory measures, to alleviate political uncertainty, causing the rise in housing prices to continue. The government is expected to unveil measures like expanding regulated areas before signs of a housing price surge spread.
On the 13th, the Ministry of Economy and Finance, the Ministry of Land, Infrastructure and Transport, and the Financial Services Commission, among other real estate-related agencies, are closely monitoring the current rise in housing prices in Seoul. An inter-agency real estate market inspection meeting will be held at the Yongsan Presidential Office that afternoon.
The day before, the real estate-related agencies held a "real estate market inspection task force (TF)." At this meeting, the government noted, "We will review all available policy measures from each agency to ensure that speculative and market disruption activities or excessive demand due to psychological instability do not hinder market stability" and added, "We will do our utmost to protect genuine buyers and stabilize housing for the underprivileged."
The government’s message of reviewing all possible policies for residential stability targets the rapidly rising prices of apartments in Seoul. Apartment prices in Seoul have risen for 19 consecutive weeks, with the pace of increase growing. According to the Korea Real Estate Board's weekly apartment price trend nationwide for the second week of June (as of the 9th), the sale price of apartments in Seoul rose by 0.26% compared to the previous week. This is higher than the increase level of 0.25% seen in the third week of March, when apartment prices in Seoul surged, mainly due to the issue of lifting land transaction permission zones.
The government is determined to curb the rise in housing prices before the real estate market reaches a "pandemic buying" situation. The most likely measures for stabilizing housing prices are to expand the application of regulated areas, such as adjustment target areas, speculative overheated districts, and land transaction permission zones, in regions with a clear upward trend in prices.
The essential requirement for designating adjustment target areas is "if the housing price increase rate over the last three months exceeds 1.3 times the inflation rate." The essential requirement for a speculative overheated district is that the housing price increase rate over the last three months is significantly higher than the inflation rate, and this standard is 1.5 times.
Based on this criterion, Gwacheon (with an apartment sale price increase rate of 4.6% over the last three months), Seongdong (2.86%), and Mapo (2.30%) meet the conditions for designation as regulated areas. A Ministry of Land, Infrastructure and Transport official noted, "We are currently considering various possibilities, and no plans have been finalized yet."
There are projections that lending regulations will also accompany these measures. However, measures such as a complete ban on lending for high-priced dwellings, which are being discussed in the market, appear to have low feasibility. It is expected that lending regulation intensity will be adjusted after observing the effects of the total debt repayment ratio (DSR) phase 3 regulations set to take effect next month.
A financial authority official stated, "It is not the case that a lot of money is being injected into the market to raise housing prices like during the Moon Jae-in administration," and added, "Since the major banks have already been managing household loans on a monthly and quarterly basis effectively, we do not determine that it is time to consider a complete ban on lending for high-priced dwellings."