All Transactions in Areas with Surging Housing Prices Will be Investigated for Speculation

Measures to investigate all housing transactions in areas with surging housing prices for land speculation are being pursued. In addition, it is predicted that loan rates for those with two residences will increase while decreasing for those without housing.

On June 15, Minister of Construction and Transportation Choo Byung-jik said at the National Assembly’s Construction and Transportation Committee’s conference, “That is a good suggestion. I’ll review investigating for speculation (in all housing transactions) in overheated speculative areas.”

That was Minister Choo’s answer to Uri Party lawmaker Roh Young-min’s question, “What about setting a fixed standard at the overheated speculative areas and investigating all transactions as a short-term measure on the hiking of housing prices?”

The Ministry of Construction and Transportation (MCT) assigns overheated speculative areas, when competition for housing deposit account is too high or speculative transactions are concerned. Currently, all of Seoul, Busan, Daegu, Gwangju, Daejeon, Ulsan, and parts of Gyeonggi, Incheon, Chungbuk, Chungnam, and Gyeongnam are tagged as overheated.

For now, if the MCT’s Speculation Countermeasure Team finds a problem in a transaction, it will ask the National Tax Service to conduct further probes.

Furthermore, on the same day, Vice Minister and Minister of Finance and Economy Han Duck-soo said at the National Assembly’s Finance and Economy Committee, “It is rational to apply low rates when people without houses buy one, and apply high rates for those that have two houses. I’ll make the Korea Housing Finance Corporation and other government related financial institutions follow such direction.”

Chi-Young Shin In-Jik Cho higgledy@donga.com cij1999@donga.com