100,000 Houses to Be Built in the Metropolitan Area

2.6 million Pyong (860 Hectare) of residential land development, which would build 100,000 new houses, will soon begin in future greenbelt-released zones in 11 cities including Uiwang, Puchon, and Kyonggi.

Also, the standard market price that determines transfer income tax and acquisition registration tax will sharply rise in areas like Kangnam, Seoul, where apartment prices recorded a sudden rise since the end of last year.

The government approved and confirmed the `residence market stabilization measure`, which includes above measures, at the meeting that was held on the 8th by Finance and Economy Vice- Minister Kim Jin-Pyo with Construction and Transportation, Education and Human Resources Development, Government Administration and Home Affairs vice- ministers, National Tax Service Deputy Chief, and Deputy Mayor of Seoul.

To prevent the proliferation of apartment-price rise, the government decided to newly build 100,000 units between years 2003 and 2004 in greenbelt-released zones in 11 mid to small size cities including Uijungbu, Namyangju, Hanam, Koyang, Kwangmyong, Buchon, Uiwang, Kunpo, Sihung, and Ansan.

Also, it decided to reinforce strong tax investigations on transfer of apartment parceling right in price-inflated areas like Kangnam to control overheated speculation investment deals.

Over-demand on deposit-basis house leases will also be controlled by decentralizing 5 reconstruction periods of low-density apartments in Chamsil, Chungdam-Dogok, Amsa-Myongil, Hwagok, and Banpo.

To disperse the localization of students in the Kangnam area, the government will implement a policy to establish more specialized schools such as private, autonomous and international schools. Tax surveillance will begin to examine private academies in Kangnam areas which reportedly charge illegally high tuition, and any violation will result in cancellation of permit.

The government will aid 30 percent of construction expenses to build 52,500 new national rental residences, which cost only 40 to 50 percent of the open market prices, in 52 areas across the nation this year. It anticipates providing a total number of 200,000 new residences by year 2003. On the short- term agenda list, the government will increase the multi-households residence construction fund, retrieved from the national residence fund, from 15,000 households to 30,000 households, and newly provide 50 billion won in aid for remodeling business that repairs residences for the elderly.

"The reason for the apartment-price rise has to do with the fact that the college entrance examination was particularly difficult this year and many moved to Kangnam for good schools and private academies. Expectations for rise in prices resulting from reconstruction also helped the sharp price increase." said Vice- Minister Kim, and added, "I will increase residence distribution and stabilize residence prices by conducting tax investigations on speculation areas."

Chan-Sun Hong bonhong@donga.com · Ja-Ryong Koo hcs@donga.com