[EDITORIALS]A consistent housing policyThe characteristic of the latest government action to control real estate speculation is that almost all measures the government can take are included ― short-term measures to be implemented immediately and medium- and long-term measures it proposes to introduce when the former ones fail. We have no objection to the all-out war against real estate speculation, but circumstances surrounding such speculation are so bad that it is difficult to see a swift effect from the measures.
As the measure this time is aimed at homeowners who have more than two units, it is expected that speculative demands will be reduced. Levying a heavy transfer income tax on those who own more than two units and introducing an integrated real estate tax earlier than planned are being done for this reason. Although the government says it has taken pains with the measure, there are still loopholes in it. The government plans to impose a transfer income tax on the actual sales price, but government databases are not integrated yet and that will be completed only by the end of next year. Introducing a real estate transaction report system is good in principle, but how to cope with the administrative burden is an open question.
To stop the spiral of real estate speculation, housing policy, the tax system and capital flows should be restructured in favor of consumers. Still, there are no solutions to the overflowing money and shortage of housing in the Gangnam area. Moreover, an education-related solution is not viable due to differences among ministries. To direct the flow of money to the stock market, the government expanded the tax exemption on dividends, but it is doubtful whether that will induce capital to flow into securities.
Speculation flares up momentarily, but is hard to calm down. Despite our hope that the real estate bubble would burst, the market reaction indicates it will be stabilized at a slightly lower level than now. Real estate policy should not be used as a means to boost the economy. It is important that the government pursue a consistent housing policy, keeping supply and demand in balance and regulating money from the real estate market.