The government held a listening discussion on expanding housing supply, where experts emphasized the need to identify the reasons for slow housing supply and enhance implementation.
Jin Mi-yun, a professor at Myongji University, presented on the topic of expanding housing supply at the 'Listening Discussion on Housing Supply Expansion for National Housing Stability' held at the Jeongdong 1928 Art Center in Jung-gu, Seoul.
Her presentation focused on what bottlenecks need to be addressed to connect the government's already proposed supply targets to actual construction and occupancy.
She noted, "The process should flow in a cycle from permits to construction to sales to occupancy, but we are currently experiencing significant bottlenecks in the construction phase."
As of May this year, the number of housing permits in the metropolitan area stood at 57,765, a decrease of about 14% compared to the recent five-year average of 67,100. Concerns have been raised that a slowdown in the supply flow from the permitting stage could lead to future shortages in construction and occupancy.
Jin emphasized, "Financial and tax support is crucial for restoring the pipeline, and we need to carefully consider how to design this to avoid distorting excessive market expectations."
The recovery of private redevelopment projects and housing supply has emerged as a key issue in supply measures. While redevelopment and reconstruction are major means to increase housing supply in urban areas, the pace of these projects has slowed due to regulations on relocation loans, rising construction costs, and decreased project viability.
Additionally, the third new towns and public land supply are also under scrutiny. The third new towns, announced in 2018, have faced criticism for not meeting expectations in construction speed due to delays in land compensation, infrastructure development, and administrative procedures. Projects utilizing urban idle land, such as the Seoripul District, Taereung Country Club, Gwacheon Racecourse, and Yongsan International Business District, are also progressing slowly due to opposition from local governments and residents, as well as relocation issues.
To stabilize the rental market, there are calls to discuss the roles of non-apartment housing and registered rental businesses. Villas, officetels, and urban-type housing can be supplied more quickly than apartments and can absorb rental demand from young and low-income households. However, the supply base has been significantly weakened due to the aftermath of rental fraud and financial and tax regulations.
Jin stated, "The issue of supply is not just a problem for the construction industry; we need to diversify the housing supply ecosystem. In particular, more than half of the houses in our country are over 20 years old, making the revitalization of redevelopment projects necessary."
Meanwhile, the government plans to continue public discussions on real estate-related topics, including housing finance and taxation, starting with this discussion.
* This article has been translated by AI.
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