[EDITORIALS]The market works

The Ministry of Construction and Transportation on Tuesday announced a plan to allow only households who do not own homes to apply for purchase rights for small and mid-size residences built on sites developed by the government or public institutions. The method of selecting applicants will also change from the current random lottery to a selection based on the age of the head of the applicant’s family, the number of family members and the period that the family has lived without owning a home.
Considering that more than 70 percent of houses are built in residential sites developed by the public sector, the plan means that the government intends to control the development and supply of most houses.
It is good to consider working-class people who don’t own a home. And there always exist people who cannot solve their housing problems on their own. Accordingly, for the sake of social welfare, the government can take charge of housing supply for them. Construction of rental houses for low-income families is important so the government should carry on such works without fail. However, the government should not get involved in how to build houses or distribute them. This should be left up to the market.
Government policies that go against market principles have a negative outcome. The government’s Aug. 31 measures, designed to curb housing price hikes in southern Seoul, have had a smaller-than-expected impact because the measures went against market principles.
Housing supply and demand should be left in the hands of the market.