Further Real Estate Deregulation Slated for Feb., March

The government and the ruling Grand National Party are working on further deregulation of the real estate market, such as no price caps on new apartments and lifting speculation regulations on three Seoul districts.

Party spokesman Yoon Sang-hyun said yesterday that the decision was made last week in a meeting of party lawmakers belonging to the “Comprehensive Countermeasures Monitoring Office against the Economic Crisis,” officials from the finance and land ministries, and civic real estate experts.

“They strongly appealed to the government that additional real estate deregulation is necessary based on the judgment that the property market should be normalized since the real economy is freezing up rapidly,” he told a news conference.

In a phone conservation, lawmaker Na Seong-lin, who attended the meeting, said the ruling party will discuss with the government amendments to laws and enforcement decrees in February and March because the real economy will likely see the worst of the economic crisis soon.

Yoon and participants at the gathering said they will push for the removal of price ceilings on new apartments that were introduced in 2006. The removal of the ceilings was a campaign promise made by President Lee Myung-bak.

The government and the ruling party will also considering lifting anti-speculative measures imposed on the three southern Seoul districts of Gangnam, Seocho and Songpa, given that apartment prices have sharply dropped.

The three areas contain many high-priced apartment complexes, so people have been prohibited from reselling newly purchased apartments and been limited in the amount of loans for housing purchases.

The timing of the deregulation will be decided after further discussion since critics within the government and business circles are voicing opposition and signs of price rebound have appeared for old apartments for reconstruction in the three districts.

Yoon said the reclassification of speculation-prone zones is possible by changing relevant enforcement ordinances without having to revise laws at the National Assembly.

To help sell unsold apartments in the provinces, both the government and the ruling party have also agreed to temporarily exempt transfer taxes by amending regulations of the Special Tax Treatment Control Law and completely or partially lift the ban on the trading of newly purchased apartments.

Also under review is a five-year waiver on transfer taxes on unsold apartments outside the capital area on the condition that the purchase is made within a year after the tax exemption is introduced.

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