Lots of ‘For Sales,’ no sign of buyers

Builders have opened a large number of apartment subscriptions this month, but the reception from potential homebuyers has been lukewarm.

According to data from Real Estate Serve, 43,245 apartment units are either on sale or will be available soon at 66 sites. That is 16,914 more than the previous month.

Real Estate 114, a local property information provider, said Monday that the apartment price in Seoul on average declined 0.05 percent the first week of June. The price for to-be-reconstructed apartments in Seoul, including housing-market barometer Gangnam, also fell 0.24 percent.

Experts said sellers are cutting prices to lure customers before the temporary acquisition tax break ends this month. However, despite falling prices, home buyers are wary of overpaying for property.

“It seems genuine home buyers are still trying to decide whether they should buy a house this month with acquisition tax cut or wait as prices continue to fall,” said a Seoul real estate agent. “For most people, they are not looking to buy houses because they think they are not likely to increase in value.”

Industry groups like the Construction Association of Korea and Korea Housing Association have been urging the government to extend the temporary acquisition tax cut.

To give an additional boost to the housing market, the Ministry of Land, Infrastructure and Transport last week came out with a plan to ease regulations for remodeling of old apartments, but experts that it would take time for the plan to have an impact as it needs to be approved by the National Assembly.

While the government struggles to come up with additional housing measures targeting the middle class, Saenuri Party lawmaker Kang Seok-ho said Monday he will propose a revision of law to provide “housing vouchers” for rent and maintenance fees to low-income families.

Under the proposal, the low-income housing subsidy would become law and be managed by the Land Ministry instead of the Ministry of Health & Welfare.

At present, renters whose income is 1.27 million won ($1,119) or less a month for a family of four can receive rent subsidiaries by cash.

For low-income families who own a house, 70 percent of the government subsidiary was given in cash, and 30 percent as a maintenance service.

But under the revision, the proportion of cash and maintenance would be reversed.

The Land Ministry expects 1 million Koreans would benefit from the new program, which would cost an estimated 1 trillion won.

BY JOO KYUNG-DON [kjoo@joongang.co.kr]