(EDITORIAL from Korea JoongAng Daily on Aug. 14)

The South Korean government recently unveiled its latest housing plan, targeting the quick expansion of housing stock to stabilize rental and sales markets. This is the third such initiative from the Lee Jae Myung administration. The new plan aims to increase housing supply in the Seoul metropolitan area by over 1.35 million units, while adding more than 230,000 homes through new construction sites, expedited development in third-generation new towns, urban public housing projects, and non-apartment housing types.

More than 120,000 units are slated to begin construction by 2030. However, none of the projected 1.58 million homes will be completed during the present administration's tenure. Consequently, the housing supply shortfall will likely endure for an extended period, prompting concerns about the policy's efficacy. The government's decision to incorporate greenbelt land exemplifies the extent to which it is striving to ensure housing availability.

Within the 100,000 homes planned on new sites, 27,000 will initially be allocated in areas such as Namyangju, Gwangju in Gyeonggi Province, and Yeomchang-dong in Seoul's Gangseo District. An additional 73,000 or more units are expected to be announced this year.

Despite the ambitious targets, a significant challenge remains: the timeline. Housing starts in Seoul and the surrounding region are currently only around 20 percent of the government's projected goals. Completion of new housing over the next four to five years is anticipated to be disappointingly low. The success of the government's housing strategy will ultimately hinge on trust and execution.

The Lee Myung-bak administration curbed market uncertainty by offering advance reservations for Bogeumjari public housing. Similarly, the current administration must demonstrate the number and location of homes it intends to supply, including through redevelopment and reconstruction. This would bolster buyers' confidence, reducing the urgency for them to take on debt to secure properties.

At the heart of the matter lies the need to streamline regulations on private redevelopment and reconstruction, which account for roughly 80 percent of housing supply in the capital region. Rather than solely relying on public development led by the Korea Land and Housing Corporation, whose presidency was vacant for an extended period, the government should expedite this process to maintain a steady housing supply.

The National Assembly should swiftly pass pending legislation aimed at accelerating housing supply. Preserving an active market is equally crucial. While President Lee pledged during his campaign not to implement measures to control housing prices through taxes, upcoming tax changes in the coming year could potentially stifle market activity.

Democratic Party lawmakers have urged the government to withdraw proposed tax increases on single-home owners who do not reside in their properties and to lower the threshold for the comprehensive real estate holding tax. The government has also announced a higher ceiling on household loan growth. However, these measures alone will not assuage public distrust, which has been exacerbated by punitive taxation and contentious housing policies.

More substantial reforms are required. Ultimately, ensuring a stable property market relies on convincing the public that housing supply will continue unabated.