Korean Government Implements New Tax and Mortgage Properties to Drive Down Real Estate Values in Seoul

Here is what the Korean government plans to do to try and drop real estate prices in Seoul:

The government is facing a severe public backlash following the announcement of its latest measures to curb rising real estate prices in Seoul, which many experts claim skew toward demand-side regulations.

The experts said the government should consider supplying more homes in Seoul’s affluent areas, describing the lopsided policies focusing on taxes and loan control as a violation of free market principles. 

The set of rules announced Monday includes raising property taxes on multiple homeowners, banning mortgage lending on properties worth over 1.5 billion won ($1.3 million) and driving down the requirement for the loan-to-value ratio from 40 percent to 20 percent on those valued at 900 million won or higher but less than 1.5 billion won.

While legal and economic experts defined the regulations as unconstitutional and anti-market approaches, progressive civic groups claimed the policies are not effective enough to achieve their intended goals.

Korea Times

You can read more at the link, but as long as supply of housing is low in the central Seoul area and demand is high, the prices will continue to increase. Here is what the Seoul Mayor wants to do:

He also criticized Seoul Mayor Park Won-soon for his remarks that the government should triple the comprehensive real estate holding tax and the ownership of real estate should be shared among citizens.

So if real estate is shared among citizens does that mean that people can just walk into Lee Myung-hee’s home, that is considered the most expensive in Seoul, and hang out?