Disclosing the costs for building private apartments is not desirable since it goes against market principles, South Korea's vice finance minister said Tuesday, standing by the government's firm stance against a tough property regulation package proposed by lawmakers.
"A policy to make building costs public creates an obstacle for private builders who seek to make profits by lowering costs," Bahk Byong-won said on an SBS radio program.
Local lawmakers are pressuring the government to require private builders to reveal building costs for apartment buildings, arguing that it will put a lid on soaring house prices.
The two sides failed to reach an agreement on the issue in their third government-party meeting Wednesday, as the government stood by its stance to leave the prices undisclosed. The government only conceded that the cost of seven private apartment construction items it puts a price limit on would be disclosed.
In their first meeting in mid-December, the government and ruling party lawmakers agreed to put a cap on sale prices for private apartments, restoring a regulation that was dropped in 1999, as housing prices in South Korea skyrocketed. In their second meeting, the two sides agreed to test a policy package offered by some lawmakers dubbed "half-price apartments," aimed at offering apartments at sharply lower prices by excluding land prices from apartment sale prices.
Soaring apartment prices have emerged as a key concern for local economists, who say the Japan-like property price bubble may burst in South Korea, Asia's fourth-largest economy, and lead the economy on a downward path. In November, South Korea's housing prices rose at the fastest pace in more than 16 years, according to data from Kookmin Bank.
But housing prices in South Korea gained at a slower pace in December than the previous month as potential home buyers took to the sidelines, the lender said.
Housing prices across South Korea rose 1.9 percent in December from a month earlier, compared with a 3.1 percent gain in November, according to the bank.
"In 2007, the government will put its top priority on creating jobs through vitalizing investment, as such a policy move will be essential in improving the lives of the Korean people," the vice finance minister said.
"In 2005 and in 2006, the economic sentiment was pretty bad because people's income expanded at the same pace as the total economic growth," he said. "In 2007, the sentiment can be better, as income is expected to grow at a comparable pace to economic growth."
Seoul, Jan. 2 (Yonhap News)
Vice finance minister opposes revealing apartment construction costs |
