Experts reacted positively to the government's measures aimed at solving the local unsold dwellings, which include directly purchasing malicious unsold APT.s. However, they evaluated that the lack of tax support measures will limit the recovery of the local real estate market.
On the 19th, the Ministry of Land, Infrastructure and Transport announced a 'regional construction market reinforcement plan' which includes purchasing 3,000 unsold APT.s from Korea Land and Housing Corporation (LH) after local completion, expanding the target for purchase-type registered lease to unsold APT.s under 85㎡, and establishing preferential interest rates for Ddimum Doul loans when purchasing malicious unsold APT.s.
Experts positively evaluated the government's support measures amid a crisis in the construction market due to the increase in unsold dwellings. Kim Hyo-sun, a senior real estate expert at NH NongHyup Bank, noted, "As the increase in unsold dwellings in the regions continues for a long time, there is a possibility that it may lead to a crisis in the construction market, making government support measures necessary," adding, "The announced support measures can be evaluated as a realistic support package for resolving local unsold dwellings."
Nevertheless, there are evaluations that this measure may be somewhat insufficient to resolve the local unsold situation. Given the gloomy outlook for the local real estate market, the lack of measures such as tax support means that private demand for purchasing local unsold dwellings could be limited. Yoo Sun-jong, a professor at Konkuk University's Department of Real Estate, said, "To efficiently resolve unsold dwellings, tax benefits must be provided," adding, "There should be easement of regulations for multiple homeowners, preferential acquisition tax on the purchase of unsold dwellings, and exemption from capital gains tax so that people may consider buying (local unsold) dwellings at least once."
Ham Young-jin, director general of the asset consulting center at Woori Bank, also explained, "The transfer tax reduction special law for five years and easing acquisition tax will be necessary for the market to respond positively beyond current expectations," stating that Kim, the senior expert, also pointed out, "Since the financial or tax support is not at an extraordinary level, it is unlikely to have a significant impact on the market," adding, "The current situation is that there is a lack of demand to purchase local unsold dwellings, so an active support approach directly supporting buyers is needed."
Regarding the absence of measures to ease lending regulations, there were opinions that it would not have a significant impact on the market. The senior expert stated, "The debt-to-service ratio (DSR) system determines the amount of loan possible, but in the regions, where housing values tend not to be high, interest rates tend to have a more significant impact than the question of how much can be borrowed," adding, "There have been indications that last year's delay in the DSR step 2 affected certain housing conditions, and since I judge that easing the DSR is not strongly related to increasing housing demand in the regions, we must be careful in deciding after observing trends in housing conditions not just in the regions but throughout the country."
There were also criticisms that specific follow-up measures must be taken regarding the government's announcement of cost normalization for construction and easing the burden of responsibility on construction companies to induce construction investment. Lee Eun-hyung, a researcher at the Korea Construction Policy Institute, stated, "Easing the burden of responsibility for completion, reducing burdens, and revitalizing maintenance are all necessary to achieve policy goals and are issues that reflect business improvement from the perspective of operators," adding, "Concrete plans with practical effectiveness must be proposed in the future."