GOV’T TO EASE REAL ESTATE REGULATIONS

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In a bold move, the government decided to remove various regulations in order to revive the falling real-estate market. Following their decision to ease apartment subscription regulations, they've now decided to ease their price standards for intermediate payment loans, resale restrictions, and the obligation for owners to live in their properties.

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Units in this apartment located in southeast Seoul are being sold. While the builders have about two weeks until their loan maturity date, concern mounts over buyers forfeiting their units because they cannot get intermediate payment loans. But the government relaxed related regulations to ease such concerns. Units larger than 84 square meters priced at over 1.2 billion won will be eligible for intermediate payment loans. Also, the government removed the obligation for owners to live in their property in the areas subject to the presale price cap system.

[Soundbite] (Realtor) : "It allows people to rent out their property to those with not enough money. This could possibly boost the number of transactions."

These regulations have been removed in all areas except for three affluent districts south of the Hangang River and Yongsangu District. The presale price cap system now applies to less areas and most apartment subscription regulations have been scrapped. Resale restrictions in the capital region will shorten from a maximum ten years to three. That means that when an apartment applicant wins a unit in the apartment lottery, he or she doesn't have to sell their existing house and the units left over in the draw may be purchased by multiple-home owners. Most of the regulations imposed on the apartment application market by the previous administration have been reverted. However, these measures may be limited in their effect as the debt service ratio rule still remains and interest rates are high.

[Soundbite] Woo Byoung-tark(Shinhan Bank) : "It could help lower the rate of buyers not signing contracts. But it cannot help lower the rate to a non-existent level."

Also, the obligation to actually occupy an owned property can be abolished only after the law is revised, which the main opposition party may oppose. Watchers say the recent deregulations could cause housing prices to further fluctuate. But Land Minister Won Hee-ryong says he would prevent such confusion by implementing appropriate measures.