WTO(World Trade Organization) has launched in 1995 right after the UR(Urguay Round: the 8th multilateral trade negotiation of GATT) ended. And Korea became the 29th member country of OECD this year. Thus, we can easily expect the market opening will be emerged according to the inner and outer motives to achieve the international free trade of service and capital.
Market opening is also a serious issue in the housing sector. However, it has not been comprehensively discussed yet. Market opening of housing sector is partially included in the opening schedule of related fields like construction service in UR and permission list of foreign direct investment prepared by the government for persuing OECD norm.
Housing sector is divided into three subsectors such as site development, house construction, and house supply for sales or for rent. House construction sector is already open in accordance with the construction service market opening in UR. Market opening schedule prepared by the government listed that site development sector is still closed and supply sector is supposed to open in partial in 1998. However, housing sector needs a sequential behavior starting from site purchase or development, to construction, and to supply of the final output for sale or for rent.
Thus, the purpose of the study is to identify the contents of market opening of housing sector by gathering the items spreaded in the several related areas, and to analyze the impacts of market opening on consumers, on house constructors, and on institutions which has been operating under the closed system. Strategic react should be made to minimize negative effect and maximize positive effect which will be arisen by the entry of foreign companies.
Due to the heavy regulations and unprofitable situation in the housing market at this time, foreign companies are seldom to enter into the Korean market in the short-run. Only the niche market of detached houses or row houses for higher income class will be attractive, which brings about relatively high returns with no price control and of which the demand is expected to increase in the future. However, as unnecessary regulations are gradually taken away in order to persue the competitive market system, foreign companies will enter into the market since Korean constructors are inferior to the foreigners in finance and in the fields which need advanced technique. First of all, foreign companies will enter into the soft area like planning, design, supervision, and management etc. They can also participate in the large scale construction of new apartment, as well as in redevelopment project, under the joint venture with domestic companies.
Entrance of foreign companies into the housing market will bring about increase in variety of house supply which gives consumers more opportunities to choose. However, increased variety may result increased damage to consumers since they cannot easily find out the defects of the house. Domestic constructors confronts severe competition with foreigners, which may cause difficulties in their business. And institutions may not applicable to foreign companies.
Thus, government should protect consumers from the prospective damage. Both the government and the constructors should pour much effort to strengthen their competitiveness. And institutions should be amended equally applicable both to domestic and to foreign companies.
- 주택시장개방의 대응전략에 관한 연구(A study on the strategic react to the housing market opening)
- 윤주현; 김혜승
주택시장개방의 대응전략에 관한 연구(A study on the strategic react to the housing market opening)
|Series Title; No||국토연 / 96-22|
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Territorial Development < General|