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Can we Solve the Increasing Housing Prices in Seoul?
김동환 강남포스트 학생기자 | 승인 2021.10.26 20:44

Since President Moon's election, apartment prices in Seoul have climbed by 50%. In addition, in 2020, house prices rose at their fastest rate in nine years, at 7.57 percent. This demonstrates how quickly apartment prices rose as well as how long it took. According to the Korea Real Estate Board, 2021 will be the biggest year-over-year increase since 2011, when it was 6.14 percent. Middle-class people were left in the dust as a result of the soaring housing prices, which made it difficult for them to buy or even rent a home.

According to a WION television interview, a 43-year-old citizen was enraged with the government because President Moon had previously promised citizens that he would minimize apartment rates, but instead did the opposite and raised them even higher. She also stated that most people lacked the financial ability to rent a home and that their only option was to relocate. Seoul's apartment prices have risen at an exponential rate due to high demand and a scarcity of supply
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To understand why there is such a strong demand in Seoul, we must delve deeper. Employees used to come to Seoul because the majority of jobs were located there, thus corporations just needed to establish branch offices in the provinces to prevent people from traveling back and forth owing to their occupations. People have now relocated to Seoul because the quality of life in Seoul is far superior to that of other provinces. Due to the strong demand in Seoul, the regions surrounding Seoul grew popular, and the territories surrounding those regions experienced great demand as well.

The government has instituted a policy to restrict further increases in house prices. In 2019, a regulation was enacted to impose price limitations on four affluent southern Seoul districts and four other locations where house and apartments prices had skyrocketed. Yeongdeungpo-gu, Seocho-gu, Gangnam-gu, Songpa-gu, Mapo-gu, Yongsan-gu, Seongdong-gu, and Gangdong-gu are among the locations. The policy was first implemented in 2014 and was effective; however, it only lasted a few months before it was forgotten since people believed it was ineffective and just added to society's issues. However, this policy has been reinstated and is still in effect throughout Seoul and the surrounding areas. However, having just a single policy was insufficient.

The expansion of supply should be considered for home price stability. Housing prices decline when supply rises and demand remains stable, according to a simple economic principle. Of course, in terms of supply, it is critical that the supply price be lower than current pricing and that the dwellings be of high quality. In the long run, we will require more metropolis cities, which will necessitate more supplies to be produced outside of Seoul to distribute the population into other cities, reducing demand in one location while also ensuring adequate supply.

Consumers in the housing market will trust these policies if they are consistently applied, and we may expect that this strategy will be effective in preventing some increases in Seoul's surging house prices.
 

 

 

김동환 강남포스트 학생기자  webmaster@ignnews.kr

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