Debate over housing policy amendment continues

The proposed amendment to the Housing Act, which includes the removal of the homeowners’ requirement to own and occupy the home as their primary residence for a minimum of two years, has not secured approval from the National Assembly’s Land and Transportation Committee. The lack of consensus between the ruling and opposition parties over the past year since January means that homeowners anticipating a move will likely remain subject to the existing obligation.

The Land and Transportation Committee of the National Assembly engaged in deliberations regarding the proposed amendment to the Housing Act. However, divergent opinions among committee members resulted in a delay in the processing of the bill. The committee is scheduled to convene a meeting before the plenary session next Thursday to review the proposal.

An estimated 47,000 homes in the Seoul metropolitan area are bound by the obligation, first introduced in 2021. Unless this obligation is lifted, homeowners falling under the price cap for new apartments will be required to own and reside in their homes for a period ranging from two to five years after settling the balance.

Starting in February 2024, homeowners of the E-Pyeonhansesang Godeok Urban Bridge apartments, comprising 593 units, in Sangil-dong, Gangdong-gu, Seoul, will initiate the move-in process. Prospective homeowners who intended to use their tenants’ deposit money to settle the balance are expressing dissatisfaction. An additional 15,000 apartment unit owners are also preparing to move in next year.

The Democratic Party of Korea has taken a cautious stance, expressing concerns about the potential promotion of the so-called “gap investments,” where investors acquire property through lump-sum housing lease contracts, allowing ownership with minimal capital. On the contrary, the government argues that such obligation may impinge on the freedom of residence. President Yoon Suk Yeol has urged the abolition of the obligation, deeming it an unreasonable regulation to curb real property speculation. The nominee for the Ministry of Land and Transportation, Park Sang-woo, has expressed a favorable view towards repealing the obligation, citing potential distortions in the housing market.


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