The Government Is Considering Raising the Base Price Other Than Gangnam Area in Seoul

Since the ‘overheating’ of the metropolitan area real estate market is not abating even after the announcement of the ‘8.9 Housing Market Stabilization Policy,’ the Government is researching additional policies.

For that purpose, it is considering expanding the target area for raising the base price, which was originally aimed for the Gangnam area in Seoul, and checking the dealing in real estate in the metropolitan area more often.

The National Tax Service announced on the 18th that it is considering raising the base price of not only Gangnam area but also recently raised areas in Seoul such as Yongsan and some apartments in Gyunggi and Inchon areas.

A National Tax Service official said, “Areas other than Gangnam area should be included in this notice to be fair if the price went up in big scale.

Therefore, the areas, where the real estate value went up more than 15% after the adjusting of the base price on April, such as Mok-Dong, Yangchon-Gu, East Ichon-Dong in Seoul, and Inchon areas were most likely to be included in the additional base price raising areas, which will be notified on early September. However, Gwachon City, Gyunggi-Do was known to be excluded because the raising margin was not that big.

The National Tax Service is also considering excluding some apartments, of which the price did not go up too much, from the adjusting of the base price.

Meanwhile, the Construction and Transportation Ministry announced that the real estate current price in some areas of the metropolitan area, Asan City, Choongnam, and Chejudo was going up, and dealing was also heating up because of removal from the development restriction area and development of new cities; therefore it designated those areas as the dealing in real estate trend watch area, and it was watching them intensely.

The areas that were designated as the watch area so far were the metropolitan new city proposed cites such as Pangyo-Dong, Sungnam City, Dongtan Area, Hwasung City, and Gyoha Area, Paju City and Asan New City, Choongnam.

And the areas that were most likely to be removed from the Greenbelt such as Yongin City, Hanam City, and Siheung City in Gyonggi-Do, and Cheju-Do, which was planned to be developed as an international free trade city, were included.

The Construction and Transportation Ministry is checking the price and dealing trend of those areas in every other week. If any concern of speculation is showing up, it will designate those areas as the dealing in real estate approval area and confirm whether there is actual speculation or not using the dealing in real estate network.

The Construction and Transportation Ministry Real Estate Policy Manager Lee, Jae-Young, said, “We will actively prevent the overheating of the real estate market by adding other areas than those areas in the watch areas if the market price goes up suddenly or too many dealing is made.”

Jae-Seong Hwang Jeong-Hun Park jsonhng@donga.com sunshade@donga.com