After a year, apartments plan is still on drawing board

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After a year, apartments plan is still on drawing board

A view of Singil-dong in Yeongdeungpo District, western Seoul in October. The Ministry of Land, Infrastructure and Transport announced last year that it selected four districts — Dobong District and Eunpyeong District in northern Seoul, Geumcheon District in southern Seoul and Yeongdeungpo District — as candidates for a development plan announced last Feb. 4. [YONHAP]

A view of Singil-dong in Yeongdeungpo District, western Seoul in October. The Ministry of Land, Infrastructure and Transport announced last year that it selected four districts — Dobong District and Eunpyeong District in northern Seoul, Geumcheon District in southern Seoul and Yeongdeungpo District — as candidates for a development plan announced last Feb. 4. [YONHAP]

 
It’s been about a year since the Moon Jae-in administration announced new supplies of apartments to bring down prices. After a year, analysts say the plan is all sizzle and no steak.
 
Under its 25th set of real estate measures announced last Feb. 4, the government promised to add 836,000 residences to the real estate market through 2025. Of them, 74 percent, or 616,000 units, were to be in the greater Seoul area, and 320,000 in Seoul itself.
 
The Ministry of Land, Infrastructure and Transport released an update report Wednesday on the project and said, “In less than a year, we were able to find the candidate sites for 503,000 units, which are around 60 percent of our target.”
 
The report also claimed the project's announcement contributed to the stabilization of the market, as property prices have been on the decline recently.
 
However, analysts say it is too soon to conclude much just because the government found candidate sites. They argue it's a long way to go until residences are built and influence prices.
 
Of the 503,000 units the government claimed to have found sites for, 333,000 units or 66 percent are apartments to be built in new development projects such as New Towns.  
 
It will take time before construction of these apartments is complete — and there are no guarantees that the developments will go as planned.  
 
One of the developments that has been delayed was the New Town in Gwangmyeong-Siheung in Gyeonggi.  
 
The project involves building a New Town with 70,000 apartments.  
 
The development was postponed early last year when its developer, the Korea Land and Housing Corp. (LH), was hit with a scandal in which its employees were accused of using inside information to make money.  
 
The project only resumed at the end of last year.  
 
The bigger problem is 170,000 units the government plans to supply through reconstruction projects within the city including areas where major transit systems are located; semi-industrial areas; and neighborhoods that currently have low-rise housing units.  
 
The government has picked 76 candidate sites for 100,000 apartments.  
 
However, residents of more than 40 candidate sites are opposing the development plans while residents of 10 candidate sites formerly submitted a letter to the Ministry of Land, Infrastructure and Transport demanding the government retract its plan.  
 
Without the consent of residents, the government may be forced to come up with an alternative.  
 
“It is too early to make a conclusion that the projects are working out well because all that has been done was finding candidate sites,” said Lee Eun-hyung, a senior researcher at the Korea Research Institute for Construction Policy.
 
Seo Jin-hyung, head of the Korea Real Estate Society, said the project overall lacks continuity as President Moon Jae-in only has three months left in office.
 
“The government boasted that it achieved 60 percent of its target, but the actual results are almost nil,” said Seo. “It is ideal that the president starts a project at the beginning of his term and concludes it at the end, but since the projects were pushed at the end, there’s little chance it will be continued in the future.”  
 

BY KIM WON, SARAH CHEA [chea.sarah@joongang.co.kr]
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