[EDITORIALS]Stop speculation nowAs overheated speculative investment in real estate spreads virtually nationwide, the government is hurriedly providing anti-speculation measures. Meanwhile, the government has repeatedly failed to curb speculation because it has tried with lukewarm measures and missed the timing of implementation, making speculators grow more resistant to anti-speculations measures.
There is no off-season for real estate speculation these days. Nearly 400 trillion won ($335 billion) is floating about in the market. During the last half of 2002 and in the last five months of this year, some 34,000 people are suspected of speculating, and more than half the apartment purchase contracts have been transferred to a third party.
Among the anti-speculation strictures of the government, the enactment of such measures, such as expanding the prohibition of transfer of purchase contracts, increasing real estate taxes and limiting the ceiling of housing finance are included. Multistory residential-commercial complexes have long been favored by speculators, but they were left unchecked. They should be included in anti-speculation measures. Reducing the ceiling of housing finance is necessary, because most of the household loans have flowed into the real estate market since the foreign exchange crisis in 1997, creating a large number of persons unable to repay loans. The government must prevent financial institutions from producing a large number of credit delinquents. It should not lose time in designating anti-speculation areas and overheated areas.
The government must not look for hardline policies only. Increasing real estate-related taxes should be promoted after careful study. Of all government policies on real estate, fixing the assessment standard of taxation at the current market price, and increasing the tax rate on property have made the least progress. Fairness and balance of taxation should not be violated. What matters most is that money earned by speculation must be returned to society through taxation. In order to save our economy, a comprehensive measure to cope with speculation is urgent.