Anchor: The South Korean government is planning to reintroduce a disputed system of capping presale prices of apartments in the private sector in a bid to curb soaring housing prices.
Choi You Sun reports.

Report: The Ministry of Land, Infrastructure and Transport said on Monday that it will implement a "presale price cap" system for privately-built apartments, in its latest effort to stabilize the local real estate market.

The ministry said the government plans to ease standards for enforcing the price caps by early October to extend the system currently imposed on public housing.

The disputed system involves capping presale prices of newly-built apartments below the price ceiling based on the actual price paid by contractors for land purchases, basic construction costs and other necessary expenses.

First introduced by the Roh Moo-hyun administration in 2007 to clamp down on soaring housing prices, the system was virtually scrapped in 2015 by the Park Geun-hye government to boost the economy.

Under current laws, the system can be enforced in private housing when the housing price increase in a region during the past three months more than doubles the inflation rate of a city or a province in the region.

Once the revision is made, 31 "overheated speculative" areas in Seoul and its surrounding region are widely expected to be subject to the system.

The resale of purchase rights for new privately-built apartments in these designated areas will be banned for up to ten years, up from the current three to four years. 

The latest move is considered to be the Moon Jae-in administration's strongest-ever measure to cool down the country's housing market.

Last month, Land Minister Kim Hyun-mee said it was the right time to reintroduce the price ceiling regulation on newly-launched flats in the private sector, citing presale prices of apartments in Seoul had jumped to more than twice the price of existing apartments.

The designation of the areas and the exact time frame for the system's implementation is expected to be finalized at a later time.
Choi You Sun, KBS World Radio News.