The government is planning to turn back the real estate regulation clock to five years ago.
Regulations across all areas of real estate, such as loans, taxes, subscriptions, resale restrictions, and actual residence obligations, will be relaxed to levels prior to the Moon Jae-in administration.
This measure was taken in response to growing concerns that a sharp downturn in the real estate market could adversely affect the overall real economy.
The Ministry of Land, Infrastructure and Transport reported its 2023 work plan to President Yoon Seok-yeol at the Blue House guesthouse today (3rd).
First of all, it contains the content that the real estate regulation area will be completely lifted except for the 3 districts of Gangnam (Seocho, Gangnam, Songpa) and Yongsan-gu in Seoul.
It is to return the regulatory area to the level before the previous government.
It was through the August 2 Measures in 2017 that the regulatory area was introduced in earnest.
At this time, after 15 years since 2002, the whole of Seoul was tied up as a speculative overheating district, and 11 districts, including Gangnam District 3, were designated as speculation areas.
As house prices continued to soar, regulations were strengthened in a double or triple overlapping manner, including areas subject to adjustment, areas overheated for speculation, and areas for speculation.
This time, as the metropolitan area was largely lifted from regulated areas, regulations on all processes of buying and selling houses, such as loans, taxes, subscriptions, and transactions, were lifted.
Along with the lifting of regulated areas, the government also reduced the areas subject to the pre-sale price ceiling system.
The pre-sale price ceiling system is also a system expanded by the Moon Jae-in administration on the grounds that new apartment complexes with high pre-sale prices encourage an increase in real estate prices in the surrounding areas.
In the December 16, 2019 measures, the number of private residential land sale price ceilings was increased from 27 to 322.
309 dongs in 18 districts in Seoul and 13 dongs in Gwacheon, Hanam, and Gwangmyeong were targeted.
For private houses subject to the pre-sale price ceiling system, there is a 5-10 year resale limit and 2-3 years of actual residence.
However, with the release of the target area, only 73 dongs in Gangnam 3-gu and Yongsan remain.
As a result, sales complexes in Seoul, except for Gangnam District 3 and Yongsan, will be exempted from the obligation to reside in the real estate, and the resale restriction period will be reduced from a maximum of 10 years to 1 year.
Regarding regulated areas and areas subject to the pre-sale price ceiling, resale restrictions will be eased, and the obligation to live in will be completely abolished.
The resale restriction period is reduced from a maximum of 10 years to 3 years in regulated areas in the metropolitan area, and from 4 years to 1 year in non-metropolitan areas.
Easing resale restrictions is a matter that requires changes to the enforcement decree and the actual residence obligation, but the government has decided to apply the relaxed regulations retroactively even if the resale restrictions and actual residence obligations remain.
Subscription-related regulations such as interim payment loan regulations and special supply will also be lifted.
The interim payment loan guarantee, which is currently only available for KRW 1.2 billion or less, will be expanded to all pre-sale houses, and the per-capita interim payment loan limit of KRW 500 million per person will also be abolished.
As a result, starting in March, you will be able to get an interim payment loan for all houses regardless of the sale price.
Now, houses with sales prices exceeding 900 million won in the speculative overheating district cannot be allocated as special supply, but this standard will also be abolished.
This is based on the judgment that there is difficulty in supplying enough housing for special demanders, such as households with multiple children.
The obligation to dispose of the existing house imposed on the owner of one house that won the subscription is abolished.
Currently, if a single homeowner wins the subscription (lottery system) in the metropolitan area and metropolitan cities, the existing house must be disposed of within two years.
In addition, homeowners will be able to apply for unranked subscription, called 'jub-jub', regardless of whether they have 2 or 3 houses.
In May 2021, the unranked subscription regulation, which was strengthened, will be released in 1 year and 9 months.
In addition, the government has decided to supply a total of 1 million public housing units over 5 years, including 500,000 units for public sale and 500,000 units for public lease.
During the last five years of the administration, 632,000 units for public rental and 144,000 units for public sale were supplied, and the number of units for public sale was greatly expanded.
The Ministry of Land, Transport and Maritime Affairs announced that it will strengthen housing options by significantly expanding public sales while sufficiently supplying public rentals for the vulnerable.
Experts are evaluating that this measure will give the housing market a bit of a breather.
However, the general opinion is that it is difficult to reverse the market atmosphere right away.
Park Won-gap, senior real estate expert at KB Kookmin Bank, said, "It may have the effect of a soft landing to reduce the decline in the real estate market, which has contracted due to high interest rates and economic recession, but we have to wait and see whether the market can rebound."