The government on Monday announced a set of measures aimed at stimulating the country’s real estate market that include cutting the minimum age of housing units open to reconstruction by up to 10 years.
The government will also move to scrap the special law on the development of residential areas that has led to the development of large new towns over the past 34 years, according to the Ministry of Land, Infrastructure and Transport.
The move comes as the country’s property market is apparently experiencing an oversupply.
An apartment complex in Mok-dong, western Seoul. (Yonhap)
As of the end of June, the number of new, unsold housing units in the country came to 50,257 with over 30,000 new homes remaining empty in the Seoul area alone.
Ministry officials said the number of outstanding permits for new housing units has also reached over 800,000.
“In the past, when the country simply did not have a sufficient number of homes, there was a need to develop large residential areas in and around urban areas,” an official told reporters, asking not to be identified.
“However, the shortage has been more than adequately addressed,” the official said of the reason to scrap the special law on housing developments.
Instead, the government will let the market decide when and where new housing units will be developed.
Currently, the state-run housing developer LH Corp. owns enough land for some 1.2 million new housing units. Instead of developing such areas itself, the public company will sell most of the land to private developers when requested.
Also, the government will ease regulations on the reconstruction of housing units to help further encourage development by private investors and homeowners.
The law on reconstruction allows any apartment building with safety issues to be redeveloped or reconstructed once they are over 20 years old.
However, most municipal and regional governments currently require a minimum 40-year use of apartment buildings before they can be rebuilt.
The ministry said it would seek to cut the minimum requirement to 30 years while also easing other requirements for reconstruction to allow development of old housing units with what it called inconvenient living conditions, such as a lack of parking spaces and excessive floor noise. (Yonhap)
