[Letters]Be consistent and communicate
Since I opened my own licensed real estate agency, I have gone through dramatic changes in the real estate market in Korea.
Right after Lee Myung-bak assumed the presidency, the prices of real estate skyrocketed along with expectations.
However, the market has plummeted with the financial crisis stemming from the United States.
The administration has put forth many measures to boost the real estate sector.
Unfortunately, however, it is hard to feel the effects on the sluggish real estate market so far.
Participants in the market are still not doing the roles that they are supposed to do.
Even though there has been a lot of reductions in the interest rate, buyers still continue to sit in the sidelines. Sellers are also hesitant to sell property.
While acknowledging that it is too early to evaluate the result of the series of [government] measures, it is time to figure out what the problems are.
To boost the housing market, the most important factor is the credibility of policy.
To a majority of people, the purchase of a home requires getting a mortgage from a bank.
Both borrowers and lenders need to trust policy in order to make decisions.
Fundamental to this trust is the consistency of policy. However, the [credit] crisis was so steep and then the administration responded with hurried steps.
For example, while the government sought to expand home loans, the government required banks to sustain sound finances. The inconsistency has deeply shaken trust in [government] policy.
Another problem is that the majority of people cannot help but have doubts about who benefits from the measures.
The series of measures were focused on easing various real estate regulations such as those governing housing land in [designated] speculation areas, and tax measures such as expanding exemption from capital gains tax in sales of real property.
The measures raised concerns over speculation reoccurring instead of boosting the real estate sector.
Also, propping up the haves and helping them remain so doesn’t really help to pull us out of the current crisis in the housing sector.
Probably the solution to the crisis will come from the middle class, which is the majority of our society.
I do not believe it is best to keep the regulations [put in place] by the previous administration. But the decision on whether to abolish or keep such regulations should be based and deliberated on an underlying principle.
And policy should be predictable.
The government’s radical move to ease various real estate related regulations and the hands-off approach hurt its consistency and caused people to fear change. To make the market work well, we still need a lot of rules.
Above all, this administration should step up efforts to communicate with its people.
The absence of communication has been pointed out as a chronic problem of this administration.
Even though the administration promised to gear up its efforts to communicate, the people do not yet see the difference. To pull us out of this crisis, communication is most important.
The wisdom to pull us out of crisis will come from communication.
Cho Hangjoon, Seoul, firstname.lastname@example.org