Real Estate : Economy : News : The Hankyoreh

Next year’s publicly announced real estate price realization rate (market price reflection rate) will be frozen at the same level as this year. The government also announced that it would reexamine whether the ‘announced price realization plan’ established during the Moon Jae-in administration, which attempted to gradually increase the realization rate and make the publicly announced price in line with the market price, is necessary. The Ministry of Land, Infrastructure and Transport announced that at the Central Real Estate Price Public Disclosure Committee held on the 21st, a plan to freeze the actualization rate of publicly announced housing and land prices next year at the same level as this year was deliberated and decided. Accordingly, the average realization rate for apartment complexes next year will be 69%, standard housing (single-family homes) will be 53.6%, and land will be 65.5%. The publicly announced prices for individual homes, which are calculated by applying next year’s realization rate decided on this day to the market price at the end of this year, are scheduled to be announced in January (standard housing and land) and April (apartment housing) next year. Next year’s announced price realization rate is the ratio used when calculating the announced price in 2020. Previously, the Moon Jae-in administration established the ‘Public Price Realization Plan’ for the first time in November 2020 to raise the publicly announced price, which remains in the 50-70% range of the market price, to 90% over 5-15 years. However, under the Yoon Seok-yeol administration last year, the implementation of the existing plan for realization was halted due to the need to ease the national tax burden. The Ministry of Land, Infrastructure and Transport used the last realization rate (2020) before establishing the realization plan for this year’s realization rate, and decided to freeze next year’s rate. The Ministry of Land, Infrastructure and Transport announced that the key reason for freezing next year’s realization rate is that it will reexamine the existing publicly announced price realization plan from the beginning. Kim Oh-jin, First Vice Minister of Land, Infrastructure and Transport, said in a briefing held at the Sejong Government Complex on this day, “If the realization plan is continuously implemented, there is a problem that the publicly announced price is calculated higher every year than the level that the public normally expects.” “We plan to fundamentally reexamine whether it exists,” he said. This means that the existing plan will be reexamined from the beginning as suggested by the Korea Institute of Public Finance, the research organization, at the public hearing on re-establishing the plan to realize the publicly announced prices held the previous day. The Ministry of Land, Infrastructure and Transport announced that in the process of ‘reexamination from the beginning’, it will not only review whether to abolish the existing realization plan, but will also review from the beginning whether it is necessary to establish a realization plan with any new goals and period. Jin Hyeon-hwan, head of the Ministry of Land, Infrastructure and Transport’s Housing and Land Office, said, “I don’t think it is a good idea to recklessly raise the realization rate without considering public acceptance.” He added, “We will expand and review several alternatives on what to do if the existing plan is canceled, and we will do so between July and August next year.” “We will reveal plans to reform the publicly announced price system in January,” he said. He continued, “We can’t predict, but if we end up not making a plan, we will also push for a revision to the public disclosure law that requires establishing a realistic plan.” Due to the freeze on publicly announced prices, real estate owners whose housing and land prices have not changed over the past year are expected to be subject to this year’s level of ownership tax next year. However, the balance between real estate types, which is considered the biggest problem with the current publicly announced price, becomes worse compared to the existing plan. In the publicly announced price realization rate that will be applied next year, the gap in realization rates between real estate types is up to 15.4% points (realization rate for apartment houses – realization rate for standard housing). According to the original plan, it should have decreased by 12% points next year (75.6% for apartments, 63.6% for single-family homes), but the government’s sudden action to stop realization is regressing the balance of publicly announced prices. Choi Min-seop, a professor at Hoseo University (real estate asset management), criticized, “The government’s policy of reexamining from the beginning and reaching a conclusion in the second half of next year is bound to give rise to various interpretations ahead of the general election and undermines the credibility of the publicly announced price policy.” Reporter Choi Ha-yan [email protected] Reporter Choi Jong-hoon [email protected]