[EDITORIALS]Real estate policies do little

The government is waging an all-out war to curb the real estate price rises. Since President Roh Moo-hyun promised earlier this year that he would keep housing prices from rising by any means necessary, government officials have also been declaring that they will focus on the real estate market.
And they have kept busy. The Ministry of Construction and Transportation quickly issued measures after the applications for houses in Pangyo, Gyeonggi province, a satellite town of Seoul, heated up the market there. Regarding the projects to tear down old apartments in southern Seoul to make way for new high-rises, Construction Minister Kang Dong-suk said the government could alter related laws to block the projects.
“The government’s house price policy is the essence of its economic policy,” said Kim Byong-joon, chief presidential policy planner. “We will curb the home price increases in southern Seoul through all possible measures.”
The government seems to be devoted to lowering apartment prices in southern Seoul. But such a policy is neither proper nor effective.
First, it is doubtful whether checking real estate prices in certain areas should be the main goal of the government’s economic policies. The president can express his concerns about the sharp growth in real estate prices and can order officials to take measures to stabilize them. But that doesn’t mean that these officials should forget their other responsibilities.
An expert government official would review the general economic conditions and decide on the importance of the real estate policy in conjunction with other policies. An expert official would not take the president’s remark literally.
It is also doubtful whether these real estate stabilization policies are even effective. When the real estate markets started rising in certain areas, the government issued measures to discourage transactions, which had limited influence on prices. The Korea Development Institute recently released a report showing that the government’s real estate policies had only a temporary effect and caused the surge in the prices in the long term.
Now it is time for the government to emerge from short-term makeshift policies to cater to the masses. There is only one solution: The government should expand the housing supply in the areas where demand is high.