All property all the time as government gets back to work

Finance Minister Hong Nam-ki makes his New Year's address at the government complex in Seoul on Monday. [YONHAP]

Property, the main issue for the government in 2020, is the first issue on the agenda this year.

One of the priorities in 2021 will be strengthening risk management against uncertainties that may arise in real estate and as a result of household debt, trade conflicts and the shrinking population, Finance Minister Hong Nam-ki said during his New Year’s address on Monday.

Hong singled out real estate and hinted that more measures may be on the way.

“Especially in relation to the real estate market, from the beginning of this year we will commit ourselves to market stabilization by throwing all of our policy capacities at it,” Hong said.

In his first New Year’s address, Land Minister Byeon Chang-heum said his goal is to ease the worries about housing and rent for average Koreans, especially in the time of Covid-19.

In a New Year’s letter to Land Ministry employees on Monday, the new minister said that among the many projects that are piled up for the government in 2021, one is solving the housing and jeonse (long-term rent deposit) issues.

Housing issues still take front and center in the New Year, with recent surveys showing the majority are less confident about the government’s goal of stabilizing the housing market.

A survey by Zigbang released on Monday found that 59 percent of 3,230 app users said they believe housing prices will continue to rise this year, while only 29 percent said they will drop.

Young people were especially skeptical. Among those in their 20s, 61 percent said housing prices will continue to rise this year, while 62 percent of people in their 30s said the same.

More than 56 percent in other age groups projected housing prices to keep rising.

Younger people drove prices up as a result of “panic buying,” as they rushed to purchase apartments out of fear of the price rising sharply and going beyond the point of affordability.

Among the 1,904 people who said they expect prices to go up this year, 36.5 percent blamed rising rents, while 18.6 percent blamed it on the lack of new supply.

Among the 937 people that said they expect housing prices to fall this year, 25.8 percent said they believe the market is currently overvalued. More than a fifth believe housing prices will stabilize due to the struggling economy.

Others think that the increase in taxes on people owning multiple properties will drive down prices.

Despite attempts to cool down the housing market since the current administration took office in May 2017, housing prices have continued to break records, which some have blamed on the numerous regulations that have limited fluid transactions of housing.

According to Korea Real Estate Board, which until recently was the Korea Appraisal Board, apartment prices in the greater Seoul area rose 0.23 percent on week for the week ending Dec. 28. That was the sharpest week-on-week increase since the end of June.

Annually, apartment prices nationwide rose 7.04 percent, and in the greater Seoul area 7.62 percent. This was in stark contrast to 2019, when nationally apartment prices dropped 1.5 percent, and in the greater Seoul area dipped 0.13 percent.

President Moon Jae-in at the beginning of last year vowed that he would never lose against real estate speculation.

BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]