[EDITORIALS]Stabilizing housing marketThe government has pulled out almost all available policy measures, ranging from taxes to restrictions on the purchase of new apartment units. It goes to show the urgency of dealing with the explosive instability in the real estate market. But as broad as the measures are, it is premature to believe that they will take care of all the problems in the housing market. The problems have been compounded in a variety of areas, and they cannot be expected to be resolved quickly.
At the core of the problem is the disequilibrium of supply and demand and the flood of liquidity into the market due to slow capital investment elsewhere. In southern Seoul, the potential for speculation has been ever present, with housing in short supply and the better living conditions the area offers. The sharp increase in the number of real-estate agents is one more factor that stimulated speculative pressure.
Stability in the housing market will never be realized without an equilibrium of supply and demand. Measures that suppress demand will have limited effect. On the other hand, the government is correct to speed the development of the Pangyo and Hwaseong districts south of Seoul and to develop additional satellite towns around Seoul. And, although it may seem strange to use education as a means of directing housing policy, the plan to establish specialized or independent private high schools in the suburbs should be consistently pursued to complement the problems in standardized education.
It is no exaggeration to say that housing policies over the years have been a series of mistakes. The government has long lost credibility on real estate, and some of the latest measures are sure to bring an outpouring of protest. But discontent among the lower-income public has already reached a dangerous level, rising in parallel with increases in housing and rental costs produced by a high-cost, low-efficiency market mechanism created by policy blunders. Only policy consistency will end the vicious cycle. The government must remember that there will be no peace in the housing market as long as it keeps giving in to the temptation to use that market as an aid to stimulate the economy.