Once again you see exactly how hard it is to get a hold on the cost of housing once the market thinks it is going to rise. Once again we have apartment prices getting restless in Seoul's Gangnam neighborhood, Yangcheongu, and some of the "New Towns." There's a sharp increase in the price of "reconstructed" apartments. You worry this will mean more despair for the common people.
The dominant prediction was that with the August 31 Real Estate Measures and follow-up programs such as the seizure of development profit from reconstructed apartments, prices would go down. So it is a serious matter if prices continue to rise despite everything that has been tried, because it means the only action left available to the government will be limited to direct regulation of the market.
For starters, it must be ascertained whether prices are the result of genuine demand or whether they are what are really being asked for in certain areas, and whether the phenomenon is a temporary one or whether it will be the trend. When there is strong demand for investment opportunities asking prices affects the actual sale prices, but that might be different now that the August 31 Real Estate Measures are in effect. The government needs to figure out whether the continued rise is because the measures have not been able to tackle the demand for investment or because of a bubble created by the prices actual owners are asking for. Only by determining what exactly the situation is will it be possible to decide what to do next. If it is the latter, then the government needs to move swiftly to get a hold on the market by conveying accurate data.
It would be good for the government to bring the August 31 measures to completion. It says it will do so by the end of March, but the there should be no reason to wait by staying on schedule when the market is so unstable. If it waits, it could easily end up waiting longer than had been planned. Certainly there needs to be a multifaceted review in order to keep from being carelessly hasty, but the government and ruling party discuss the issue as if they don't take it seriously enough. They have one meeting, then wait days for whatever happens next. Finally we would hope that in order to avoid endless follow-up measures, the government would approach "apartment purchasing rights" and policy for those who own no homes in a more rounded fashion.
The Hankyoreh, 13 March 2006.
[Translations by Seoul Selection]
[Editorial] Take Apartment Prices Seriously |
