Minister says real estate measures are just the start

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Minister says real estate measures are just the start

The minister of land, transport and infrastructure on Thursday defended the government’s efforts to regulate an overheated real estate market and said they were just the beginning of long-term efforts to change the market’s structure.

Kim Hyun-mi, whose ministry released the toughest measures yet to discourage mortgage lending in hot areas in August, said the rules were able to curb the expansion of investment in real estate.

“I believe that I have placed a cornerstone stabilizing the [housing market] and calming the overheated market,” said the minister, who took the position in June.

Even before she was appointed, Kim frequently stressed her belief that the rapid rise in apartment prices was not driven not by people seeking homes to live in but by speculative investors.

In June, the government rolled out a set of measures to regulate the market, but it saw little impact on apartment prices. A second set of measures released in August labeled all districts in Seoul as “overly speculative” along with the cities of Sejong and Gwacheon in Gyeonggi. The designation meant buyers seeking loans in these areas would be subject to stricter scrutiny.

According to the Korea Appraisal Board, before the August measures were announced, Seoul apartment prices on average grew 0.18 percent every week. But since the measures were introduced, the growth rate has been falling for five consecutive weeks. This month, it has been unable to budge past 0.05 percent.

The minister said she has been focusing on housing policies that benefit the general public rather than investors and upper-income households.

“Although it is still early to evaluate the policies, one thing [I’ve been] clear on is that the direction will be centered on the people,” Kim said as she celebrated her 100th day as minister. “Housing stabilization is the ministry’s top priority.”

Kim has set her next goal as increasing the number of low-rent apartments and plans to start by assessing data on housing situation for low-income households spread out in different departments within the ministry to gain a better understanding of the situation and improve policies on rental apartments for low-income households or people who are less financially secure, such as students.

“In order to create stable housing conditions for those living on long- and short-term rents, we need to know who they are and what conditions that they are living in,” she said.

Kim also plans to double the supply of apartments built exclusively for newlyweds.

Currently, only 15 percent of new public housing was given to newlyweds.

That ratio will be raised to 30 percent for public housing and from 10 percent to 20 percent for privately built apartments.

The ministry plans to ease the eligibility conditions for these apartments. Currently, newlyweds need to be married for less than five years and have kids.

The requirement will be eased to less than seven years of marriage, and children will not be necessary.

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