`Heavy transfer tax abolition bill should be promptly passed`

“Key bills on real estate regulations including the abolition of the heavy transfer tax for multiple home owners, flexible operation of new home price cap system and permanent reduction of realty acquisition tax have to be passed promptly in order to normalize the housing market.”

Land and Transportation Minister Seo Seung-hwan said in his keynote speech at the 2013 Dong-A Real Estate Policy Forum on Thursday, “Excessive regulations that were introduced during the rising period of housing prices have still remained, aggravating a recession in the housing market.” Regulations intended to prevent speculations during the time when houses were in absolute short supply now obstruct the purchase of ordinary people and sound investors in the market today when excessive profits cannot be expected from realty investment.

Minister Seo concerned that “continuing difficulties in the housing market are likely to turn into risks in the people’s livelihood, financial system and overall economy,” saying, “While the sentiment for housing purchases has constricted, the supply of houses has increased due to changing demographics and lowering expectation for home prices rise, which eventually results in a recession in the housing market.”

He pointed out, “A house was an object of everyone’s envy in the past, but today many people are struggling because they own a house,” adding, “Now that expectation for surging housing prices have disappeared, it should be understood that houses are for residence, not for investment and the paradigm of housing policies should be shifted accordingly.”

With regard to the jittery jeonse (a housing lease on a deposit basis) market, the minister said, “Although the rise of security deposit is forecast to slow down after November when the peak moving season in fall ends, anxiety in the market will be sustained if trades continue to be in a slump.” He urged understanding and cooperation of the National Assembly by saying, “Measures to normalize the housing market should be smoothly implemented in order to stabilize house sales and jeonse trades at the same time.”