The government will review easing restrictions on the transfer of reconstruction and redevelopment association membership in areas designated as speculative overheating zones. It also plans to unveil additional support for vulnerable borrowers soon, using excess tax revenue and other resources, as high interest rates persist.
Land, Infrastructure and Transport Minister Hong Ji-sun said on the 23rd that the ministry would "review" the issue, responding to a call from Rep. Hwang Hee of the Democratic Party of Korea to ease the transfer restrictions during a parliamentary audit by the National Assembly's Land, Infrastructure and Transport Committee.
In speculative overheating zones, membership transfers are currently barred after approval of association establishment for reconstruction projects and after approval of the management disposal plan for redevelopment projects. The number of affected project sites rose sharply after all of Seoul and other areas were designated as speculative overheating zones under the Oct. 15 measures last year. Both the redevelopment industry and the Seoul metropolitan government have repeatedly called for lifting the designation, saying it blocks transactions.
Hwang said that restricting the transfer of association membership while pursuing tax policies designed to encourage multiple-home owners to sell leaves such owners unable to find buyers even when they want to sell. Hong left the door open to revising the rules, saying, "I will check whether what you describe is exactly accurate."
At the comprehensive audit of the National Assembly's finance committee, support for vulnerable borrowers facing high interest rates and the management of the future response fund emerged as key issues. Rep. Kim Tae-nyeon of the Democratic Party called for additional fiscal measures, saying, "Prolonged high interest rates are increasing the burden on vulnerable borrowers and the self-employed." Park Hong-keun, minister of planning and budget, said: "The president recently asked us to prepare additional measures to supplement support for vulnerable borrowers and low-income households by using excess tax revenue and other means. Relevant agencies are now in discussions." The government announced support measures for vulnerable borrowers in August and reflected some of them in next year's budget proposal, but the size and timing of the additional measures have yet to be decided.
Friction between the finance ministry and the budget agency that surfaced during work on the future response fund also came under scrutiny. Rep. Park Soo-young of the People Power Party raised suspicions that the finance ministry had been bypassed, citing a post by one of its deputy directors on an internal bulletin board criticizing the fund as potentially undermining fiscal discipline.
Park said the ministry had coordinated major policies in advance, stressing that "the authority of the deputy prime minister for economy to oversee and coordinate economic policy must of course be respected." He added, "I also respect the deputy director's criticism as a point raised out of concern for the country, public finances and the economy."
Bank of Korea Governor Shin Hyun-song said he agreed with the assessment that a return to the era of ultra-low interest rates would be difficult. "I share that view," he said. "We will conduct policy in response to a situation of higher growth and higher interest rates going forward." He added that growth is expected to exceed the August forecasts for both this year and next, and that the bank will release revised projections after the November monetary policy board meeting.