[EDITORIALS]Time for a new housing planThe goverment recently announced a “soft landing” plan for the construction industry. It focuses on the expansion of public projects and land distribution as well as providing more low-income apartments. The plan is seen as an expression of the government’s determination that it will not let the construction industry, which accounts for 17.5 percent of the gross domestic product, slump when domestic demand is lagging. Unfortunately, the government still has to understand the situation correctly and present an adequate solution.
The biggest reason for the recession in the construction industry is the slump in demand. Real estate transactions are at a virtual standstill and installment sales of new apartments are down. It would be difficult to expect a “soft landing” of the construction industry depending only on the expansion of supply. Of course, the possibility of a real estate speculation boom complicates matters. Nevertheless, the present policies are detrimental to both the demand and supply of real estate with its high rate of taxation. We need to give breathing space within the limit of not inviting speculation.
The most important thing is to boost confidence in the government. The government has opted for harsh measures in the face of signs of a speculative boom in real estate since last year. The public finds it difficult to trust a government that has ignored all the warning signs in the past and has a record of tightening regulations in the face of public censure when a speculative trend arises. That the government searches for an “appeasement policy” usually within six months when obvious negative side effects arise doesn’t help the public trust.
Recent government policies give the impression that it is being harried; the government has reason to feel that is the case. The economy has deteriorated, which is all the more reason for the government to be consistent. The major obstacle to investment and consumption is the uncertainty caused by nontransparent policies. The government should put forward a careful analysis and fundamental solutions instead of easing regulations, expanding spending and building more houses every time. Such old measures won’t boost public confidence, much less have any significant effects.