Announcement of Real Estate Deregulation Delayed

The announcement of real estate measures slated for Thursday has been delayed, raising fears over prolonged sluggishness of the real estate market.

An emergency Cabinet meeting Wednesday discussed whether to raise the debt-to-income ratio to boost real estate transactions. Attending the talks were Strategy and Finance Minister Yoon Jeung-hyun; Land, Transport and Maritime Affairs Minister Chung Jong-hwan; Financial Services Commission Chairman Chin Dong-soo; and Financial Supervisory Service Gov. Kim Jong-chang.

Economy officials failed to narrow differences over deregulation, however, leading to the cancellation of an emergency economic meeting that would have been chaired by President Lee Myung-bak Thursday.

In a news briefing after the meeting, Chung said “We discussed a range of issues including the debt-to-income ratio and taxation, and decided to examine their effects before jumping to a conclusion. Suggestions said the announcement could be made on just the agreed matters, but we decided to postpone them until fully prepared with a comprehensive set of measures.”

Though the government did not decide when to make the announcement, it could come late next month at the earliest given the time needed to resolve differences among the parties involved and fine-tune tax matters.

At the meeting, economy officials all agreed that the biggest problem is the sluggishness of real estate transactions rather than falling apartment prices but disagreed over the manner of resolution.

Chung said the debt-to-income ratio should be raised to jump start transactions, but Yoon stuck to his previous stance that a hike in the ratio is not the proper answer.

lovesong@donga.com