[EDITORIALS]Confusion on housing policyThe government finally announced comprehensive measures to curb real estate speculation. The main provisions are to increase property and capital gains taxes, to develop large housing complexes using public land and to increase regulations on real estate transactions.
For a short period of time, the new measures are likely to be effective in stabilizing housing and land prices. But in the long term, the measures are likely to distort the real estate market and reduce the effectiveness of land usage, because the purpose in creating the new real estate policy is uncertain and the measures are not appropriate to the policy.
Everyone knows the government decided to take such drastic measures because of the rising apartment prices in Gangnam, southern Seoul. But the policy goal has quietly changed to punishing those owning expensive land and houses from stabilizing housing prices in the area. Thus, there is confusion about whether the government aims to stabilize housing prices or increase class conflict by making people consider that owning real estate is a sin. A government official’s explanation that only 2 percent of the population will incur a higher tax burden shows where the policy is heading.
The new measures expanded the scope of the government’s intervention in the real estate market. Violating free market principles could do more damage than actual speculation.