August 13 Real Estate Measures: 'Filling Numbers' with Closed School Sites and More

The '現場이 답이다' (The Answer is on Site) channel criticized the August 13 real estate measures for being not significantly different from previous policies and for overlooking actual residential value by rushing to increase supply numbers. It pointed out that such policies could lead consumers to purchase apartments they can never sell or induce young people to invest in villas with low development potential.

Jeon Eun-seong warned that these measures focus solely on quantitative supply rather than solving the fundamental problems of the housing market, which could ultimately result in significant losses for home buyers in the long run.

Jeon Eun-seong expressed concern about the inclusion of closed school sites in the government's first phase of leading projects. She pointed out that building apartments on closed school sites, which are difficult to utilize even as schools, has a high likelihood of resulting in homes that are difficult to resell and thus can never be sold.

This criticism suggests that while developing less preferred areas might contribute to securing short-term supply, it could cause serious problems in terms of long-term residential stability or asset value.

While these measures actively support new housing supply with public funds, they make it difficult to get loans for existing homes. Jeon Eun-seong pointed out that this policy encourages new supply but could hinder liquidity in the existing housing market and exacerbate imbalances.

The analysis suggests that as public support is concentrated solely on new housing, the risk increases that demanders may indiscriminately choose any newly supplied housing.

Jeon Eun-seong expressed skepticism about the policy of converting commercial and business facilities into residential spaces and high-density development. Regarding the content encouraging early commencement of existing projects, she questioned the effectiveness of the policy, remarking, "They should have done it sooner." Citing past instances where similar policies were discussed but yielded little effect, she predicted that this time, too, it would be difficult to bring about substantial change.

She criticized the policy for merely rehashing previously attempted methods rather than offering new solutions, arguing that this would ultimately only serve to meet supply quantity targets.

The easing of building codes plays a significant role in these measures, allowing for more homes to be built by increasing the floor area ratio. Jeon Eun-seong explained that this could bring attention back to lands where the floor area ratio was not fully utilized in the past or that were built in complex forms, leading to lower construction costs. She warned that if villas are indiscriminately supplied on such lands, there is a high risk that young people might purchase them because they are cheaper than market prices, only to end up owning homes that can never be redeveloped due to low future redevelopment potential.

She expressed concern that while easing building codes might contribute to increased supply, it could also lead to adverse effects such as a decline in the quality of living environments or an increase in speculative housing.

The government announced the easing of housing construction loan regulations, stating that loans would be supported regardless of demolition, unlike in the past when demolition had to be completed first. Specifically, in certain areas such as the Seoul metropolitan area, LTV will be recognized up to 60%, facilitating balance loans. Jeon Eun-seong pointed out that this policy could lower entry barriers for new construction developers, encouraging a proliferation of new villa supplies.

She warned that this could lead anyone to easily purchase land and jump into housing construction, causing oversupply, and potentially resulting in a massive influx of new homes with low residential value.

Jeon Eun-seong emphasized that the government's August 13 supply measures should not be blindly trusted. She warned that these measures could lead to purchasing homes in areas that can never become apartments or buying apartments in regions where future resale would be difficult. She reiterated the importance of 'sifting the wheat from the chaff' in the housing market, advising consumers to approach housing selection with more prudence and caution than ever before.

She made it clear that indiscriminate investment should be avoided, and a wise judgment is required to meticulously assess the long-term value and development potential of each home.