Gov’t lifts real estate restrictions except greater Seoul and Sejong

Sep 22, 2022, 09:30 am

AsiaToday reporter Lee Min-young

The government lifted real estate restrictions for most areas outside the metropolitan area except Sejong. In the greater Seoul area, regulations have been either lifted or eased for Incheon and the suburbs.

The Ministry of Land, Infrastructure and Transport held a housing policy review committee on Wednesday and passed a vote of the real estate regulation adjustment plan.

Under the adjustment plan, four regions including Sejong and parts of Incheon will be no longer considered speculative areas. Speculative real estate regulations have been lifted for all 36 regions outside the metropolitan area, including Busan, Daegu, Daejeon, Ulsan, Cheongju, Cheonan, Nonsan, Gongju, Jeonju, Pohang, and Changwon. In the metropolitan area, five areas including Anseong, Pyeongtaek, Dongducheon, Yangju and Paju in Gyeonggi Province will be no longer subjected to adjustments.

As a result, the number of areas designated as speculative has been reduced to 39 from the previous 43, while the number of adjustment-applied areas has been decreased to 60 from the previous 101. The land ministry said the decision was made in consideration of the recent falling housing prices.

For Sejong, the government decided to lift Sejong from the designation of speculative areas due to falling house prices, but maintain the city as price-moderating adjustment area considering the low rate of unsold pre-sale homes and high competition for apartment applications.

For regions in Seoul and Gyeonggi Province, the entire areas remain as speculative and subject to adjustment. “Seoul and its neighboring areas have few unsold pre-sale homes and the market remains unstable due to expectations for deregulation. So we decided to maintain the regulation and monitor the market situation further,” said Kwon Hyuk-jin, head of the housing and land office at the land ministry.

Once lifted from regulations, the region will be free from many regulations involving loans for housing purchase as well as taxation, subscription of homes, and reselling of real estate rights. For those regions designated as speculative, the loan-to-value ratio is limited to 40 percent for apartments appraised at 900 million won or less. That figure drops to 20 percent for those appraised at 900 million won or more. For apartments appraised at 1.5 billion won or more, no loans are available. The restriction is eased for apartments in areas designated as monitored, with a 50 percent ratio applied to those appraised at 900 million won or less and 30 percent for those appraised at 900 million won or more.

The regulation adjustment will take effect on Monday next week.

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