The government’s comprehensive housing policy package announced on Monday elicited a favorable market response, raising hopes that it could inject life into the moribund real estate market.

Now attention shifts to the National Assembly, as whether or not the package lifts the housing market from stagnation depends to a large degree on how lawmakers handle it.

In this regard, they are advised to amend the relevant laws as early as possible for a swift implementation of the proposed measures. Time is of the essence in executing real estate policies.

The package is primarily aimed at revitalizing housing transactions by addressing the imbalance between housing supply and demand, the main cause of the long slump of the housing market.

One factor behind the imbalance is population aging. Until recent years, the housing market has been driven by baby boomers ― people born between 1955 and 1963.

But this large cohort has begun to retire, causing demand for homes to fall sharply. Furthermore, the prolonged economic slowdown has left many post-baby boomers without the wherewithal to buy a house ― hence the rising stock of unsold homes amid falling prices.

To curb the oversupply of homes, the government has rightly decided to cut the number of new housing units provided by the public sector from the current 70,000 per year to 20,000.

At the same time, it will also put an end to President Lee Myung-bak’s pet housing project, which calls for constructing 1.5 million low-cost housing units for houseless families between 2009 and 2018.

This project, although well intentioned, has not only worsened the imbalance in the housing market but fueled the decline in home prices by supplying houses at inordinately lower prices.

On the demand side, the government seeks to encourage houseless families to purchase homes by providing generous incentives.

For instance, a houseless family with a combined annual income of less than 60 million won will be exempted from the acquisition tax when it purchases a house worth less than 600 million won and under 85 square meters within this year.

To ensure that first-time homeowners take out a mortgage with ease, the government plans to double its mortgage fund from the current 2.5 trillion won to 5 trillion won. For these families, banks will not apply the debt-to-income rule and ease the loan-to-value ratio.

The package also proposes that anyone who purchases a new or unsold housing unit of less than 900 million won and 85 square meters within this year be exempted from the property transfer tax for five years following the purchase.

The package also included measures aimed at easing the financial difficulties of the so-called “house poor” and “rent poor.”

People who are in arrears in mortgage repayment will be either granted debt rescheduling or allowed to sell part or all of their home equities to real estate investment trusts under a sale and lease-back arrangement.

For families without the key money for renting a house, the government will introduce a system where a homeowner takes out a loan for the tenant, who then pays the interest on the debt. The homeowner will be given tax benefits in return for the trouble he takes for the tenant.

It remains to be seen how effective all these and other measures of the package will be. But many analysts express the view that they will stimulate demand for homes and increase housing transactions, at least in the short term. Hopefully this can prevent home prices from falling further.

If people begin to think that housing prices have hit bottom, transactions will increase further. But to generate this change in perception, early implementation of the package is essential. Lawmakers need to heed this point.

Lawmakers are also urged to amend outdated laws that were introduced years ago to curb real estate speculation. These laws simply hinder the normal operation of the housing market.

For instance, the Roh Moo-hyun government raised the capital gains tax rate for owners of multiple homes to 60 percent as part of its effort to curb speculation in housing.

Now, there is a need to encourage wealthy people to own multiple homes to boost demand. This means the excessively high transfer tax for these people needs to be brought back to the normal rate of 6 to 38 percent.