Dealing with Real Estate Restrictions in the Chungcheong Area

It turns out that a comparatively strict standard was applied to Chungcheong Province in the course of appointing and lifting various real estate restrictions, including the ruling of the province as a speculative area due to the fact that it was to be the place for capital relocation. This relative disadvantage is expected to vanish.

According to the Ministry of Finance and Economy and the Ministry of Construction and Transportation (MOCT) on Friday, October 22, the government will announce measures to support the construction business in the Chungcheong area, and after monitoring the movement of land and home prices, it will decide whether or not to lift the restrictions related to real estate, such as the appointment of speculated areas.

The appointment of the special provisional districts for land transactions and the regulations restricting approval for construction, which were announced based on the “special law on the construction of the new administrative capital,” have automatically lost effect with the Constitutional Court’s ruling on October 21 that invalidated the capital relocation project.

However, housing and land speculation-prone areas, overheated speculation zones, and land transaction-permitted areas are not appointed by this special construction law but rather by the individual laws of the MOCT, and so the circumstances are different.

In the case of speculation-prone zones, the fact exists that real estate prices can rise since the Chungcheong area was a candidate for capital relocation, yet not one area has been lifted; however, the likelihood has become greater to lift places that have a high drop in prices.

The government will discuss the measures of managing the appointing system for speculation-prone zones next week at a council meeting to stabilize real estate prices.

Overheated speculation zones, which other regions are also strongly requesting for lifts, have a higher possibility of being lifted with priority over other restrictions.

An MOCT authority said, “The conditions for Chungcheong Province have become similar to other regions. However, lifting regulations will have to follow confirmation that shows that statistical figures of home and land prices of the related area have stabilized; thus, watching over the price trend is the only thing we can do for the moment.”

Kwang-Hyun Kim kkh@donga.com