Real Estate Forum Set for July 23: Aligning Policies Beyond 'Deregulation vs. Regulation'

The government will hold a real estate forum on July 23, led by the President. After gathering opinions on supply, finance, and taxation, the focus now shifts from collecting views to establishing policy priorities and implementation timelines. It is essential to reconcile immediate measures to curb housing prices with long-term policies aimed at increasing supply, while also managing household debt and financing for housing construction to avoid conflicts. If the discussion remains stuck in the familiar debate of 'deregulation vs. regulation,' it will only heighten market uncertainty.

Currently, the market is difficult to characterize in a single direction. Recently, apartment sale prices and rental prices in Seoul rose by 0.30% and 0.28%, respectively, over the course of a week, indicating a simultaneous increase. While some areas are experiencing rising home prices, there is a backlog of unsold homes in provincial regions even after completion. The shortage of new housing in the metropolitan area is becoming a reality, yet the pace of new construction and sales is not recovering evenly. It is natural for the government to be cautious about overheating housing prices and household debt. However, it must also address the deteriorating business viability in the supply sector, financial tightening, and the weakening of the long-term supply foundation. Applying a one-size-fits-all solution without distinguishing between regions and housing types could exacerbate stagnation in some areas while attempting to control overheating in others.

Both short-term and long-term measures are necessary for supply. Rental housing and non-apartment supply are essential to fill immediate gaps. However, non-apartment supply cannot replace the volume of apartments entering the market, and it has limitations in addressing future supply shortages. Redevelopment, reconstruction, and private housing projects should not be postponed simply because they take time. If not initiated now, supply shortages will recur in three to five years. The government must present both short-term supplementary measures and long-term apartment supply plans simultaneously.

Financial measures must also be categorized by purpose. Housing purchase loans that could drive up prices should not be treated the same as financing for actual housing supply projects. However, it is also not acceptable to loosen all regulations under the guise of supply. Financial support should be selectively provided only for projects with clear feasibility and supply effects, as well as defined uses of funds. Financing for actual demand should also be assessed based on housing prices, income, repayment ability, and actual residency.

Taxation must consider not only the number of properties owned but also the value of holdings and actual residency status. Adjusting the burden on owners of high-value, non-resident, or multiple properties must not block the exit for transactions. Raising property taxes alone could lead to a lock-in effect on listings and shift the burden to rental prices. Property and capital gains taxes should be designed together, clearly outlining the subjects of tax burdens, their intensity, timing, and transitional measures.

At the forum on July 23, the President should not present a compromise that merely mixes the demands of stakeholders. Instead, there should be immediate market stabilization measures, a timeline for construction within the term, and a phased schedule leading to completion and occupancy. Clear criteria must also be established to differentiate between financing for actual demand and speculative loans. If the policies on supply, regulation, finance, and taxation operate independently, one set of measures could undermine the effects of another. Having listened sufficiently, it is now time to set priorities and take action.