Seoul’s housing prices show signs of cooling: finance minister

Home prices in Seoul and the neighboring area have shown some signs of stabilizing on the back of the government’s price-curbing measures, Deputy Prime Minister and Finance Minister Hong Nam-ki said Tuesday.

He also rolled out plans to provide some 60,000 new public apartments in greater Seoul in 2021-2022, with subscriptions due to start next year.

“A month passed since taking effect, the Aug. 4 (housing) supply measures appear to be paying off to a certain extent,” the fiscal chief said in a ministerial meeting held at Seoul Government Complex to review the real estate market situation.

“Recent transaction data shows that a considerable number of areas have seen (housing) prices decline.”

Seoul’s apartment prices remained almost flat during the final two weeks of August, gaining 0.01 percent on-week slowing from the 0.04 percent on-week rise earlier in the month.

The relatively affluent Gangnam belt -- Gangnam-gu, Seocho-gu, Songpa-gu, and Gangdong-gu -- saw average apartment prices remain flat last month, the minister added.

“The market sentiment in greater Seoul turned from overheated to a wait-and-see approach in August, showing some signs of steadying,” he said.

“Also, due to the enhanced tax rules, companies have increasingly been putting their apartment assets on the market, a selling trend which we expect to continue for a while.”

The key at this point in time, according to the finance minister, is to push ahead with the existing measures without faltering until the market fully embraces the government’s policy directions.

While the early-state measures were mostly centered upon loan regulations and penalties on speculative multiple home owners, the latest actions allocated more efforts into expanding the overall supply by securing new housing sites for public apartments and easing rules for urban reconstruction.

In August, the Moon Jae-in administration added another set of real estate regulations, marking the 23rd of such kind since 2017, in a relentless effort to gain control over the bubble-prone housing market here.

The announcement included a mid-term plan to add 132,000 new homes in Seoul and nearby areas, including 110,000 in Seoul itself, by 2028.

As a follow-up action, the government will start selling 30,000 public residential units in 2021 and another 30,000 in the following year out of the 240,000 that are slated to be built in Seoul and Gyeonggi Province, with subscription procedures to kick off as early as July next year, Hong said.

“We have decided to advance the subscription timeline so that the people may actually feel the improved housing supply situation,” he said.

As for the Taeneung Country Club, a military-owned golf course that is to be turned into a new public housing site, subscriptions will start once the public transportation measures are laid out.

The US military base Camp Kim in Yongsan will be open for housing subscriptions after the process of returning the property to the South Korean government is completed.

By Bae Hyun-jung (tellme@heraldcorp.com)