Pres. Lee Urges Gov`t Help for Home Buyers

President Lee Myung-bak said Thursday that the government should help people buy houses for residential purposes.

“The government should focus on addressing transactional inconvenience for those who want to buy a house for residential purposes,” he told an economic contingency meeting he chaired at the presidential office in the morning. “Housing prices must remain stable.”

“The time for buying a house for real estate speculation is over. A house must now be bought for residential purposes and not speculative purposes,” the president added.

“The government needs to look at policies in detail for those who want to buy a house to live in. Please review policies from the perspective of residential stability to help people who cannot sell a house even if they want to move or have difficulty because jeonse (housing deposit) has risen dramatically.”

His comments seem to indicate that the government will seek to encourage more real estate transactions without increasing housing prices.

“Certain figures from the private sector asked for the easing of the debt-to-income ratio, but the conclusion was that we are in no condition to consider it,” a presidential aide said, “The volume of transactions in the housing market is extremely low, so we ordered related agencies to help alleviate this.”

The government will announce at the end of the month measures to promote housing market transactions. Since it has focused on price stability, however, prospects are dim that new methods can jump start transactions without raising prices.

One measure under consideration is a revision to the April 23 plan to alleviate the glut of unsold apartments in the provinces and promote transactions. An official at the Land, Transport and Maritime Affairs Ministry said, “Since the release of the April 23 measure, we`ve provided loan assistance to new home buyers who plan to move to new houses, but the results have been poor. We`re considering easing the scope of housing or limitation conditions.”

On the risk of a chain collapse of construction companies, President Lee said at the meeting, “We`ll look at the difficulties that certain builders are facing, but they should be held responsible for burdening many people after irresponsibly jumping on the bandwagon in the housing market.”

koh@donga.com jarrett@donga.com