President Lee Jae-myung stated on October 19 that while expanding housing supply is essential for stabilizing the real estate market, loan regulations must be designed more carefully to avoid harming genuine buyers. He projected that housing supply would normalize after 2028, despite ongoing impacts from past declines in permits and construction.
On this day, President Lee made an unannounced visit to the Cheong Wa Dae press room, where he held a lunch and subsequent Q&A session with reporters, addressing key national issues including livelihoods, the economy, and foreign affairs.
Initially planned as a closed meeting, the session was opened to the public at the president's request. The Cheong Wa Dae spokesperson explained that this reflects President Lee's commitment to communicate openly with the public.
During the meeting, President Lee encouraged reporters to lead the discussion, stating, "I don’t have any special remarks, so please feel free to ask questions." He acknowledged the challenges in the real estate sector, describing it as "a truly difficult issue" and reaffirmed his administration's goals of stabilizing the real estate market and housing prices.
He noted that rising real estate prices have long been a primary means of asset accumulation in South Korea, leading to a mix of expectations for price increases and despair among those excluded from the market.
"When looking at the real estate market over the long term, the fluctuations are significant," he said. "Overall, there will inevitably be a crash at some point. There are concerns about who will bear the final burden of that crash."
Regarding loan regulations, President Lee emphasized the need to suppress speculative demand while considering the circumstances of genuine buyers. He remarked, "We need to discuss whether it is appropriate for someone to take out loans beyond their means to buy a house in hopes of making money."
He pointed out that applying uniform loan regulations could create issues for those who need mid-term or final payments on their loans. "We must continue to verify that any measures, including loans, are based on concrete validity to minimize problematic cases," he added.
However, he expressed concern over excessive borrowing for home purchases, stating, "The belief that buying a house with borrowed money is a good investment has been ingrained in people's minds for too long." He highlighted the recent increase in auction listings and delinquency rates, as well as the growing burden of mortgage interest rates.
On housing supply, President Lee emphasized the significant time lag between permits, construction, and actual occupancy. He explained, "The housing market typically takes at least three years, with a minimum of two years and up to four years in some cases. The impact of the sudden drop in permits and construction in 2022 is now becoming evident."
He noted, "We are trying to increase supply starting this year, but there will be a lag of 3 to 4 years. The systematic reduction in supply has left the market unable to cope. Proper normalization of supply will only occur after 2028."
President Lee also reaffirmed his administration's commitment to normalizing real estate taxation. He stated, "Claims that we raised taxes to control housing prices or to collect more taxes are entirely false. This is a matter of tax justice."
He questioned whether it is normal to provide significant tax breaks for properties purchased for profit, asserting that those investing in real estate should pay taxes appropriately.
When asked about his reflections after 500 days in office, President Lee acknowledged shortcomings in preparation and communication during policy implementation. He stated, "The biggest obstacles may have been my lack of preparation and process management. I reflect that I may have had a kind of overconfidence while pursuing reform tasks."
He added, "I think there was a strong belief that we would eventually improve, so we should just endure for now. I also believe we lacked the ability to empathize and comfort those who might lose something."
Regarding the recent rebound in national approval ratings, he remarked, "Many have advised me not to be overly concerned about approval ratings, but it is difficult not to pay attention. I am glad to see some improvement in evaluations, and I believe we must work harder with humility."
President Lee highlighted achievements such as potential growth rates and reductions in industrial accidents and suicide rates, while acknowledging that the effects of governance improvements are gradual and often not felt by the public. He emphasized, "Making these improvements tangible is the top priority of a government accountable to the people."
He also recognized the need for better communication regarding policy outcomes, stating, "My frequent use of Twitter is part of our effort to convey our sincerity, and today’s sudden conversation with you is part of my reflection on whether we are too disconnected from the field. I deeply reflect on whether our sincerity is being properly conveyed. The biggest reason is me."
On the recent stock market decline, President Lee clarified that the government would not directly intervene in the market. He stated, "When the market rises significantly, corrections are inevitable. No one knows at what level this will occur. It is neither feasible nor desirable for the government to intervene directly in the financial and stock markets."
However, he maintained his position that the domestic stock market remains undervalued. He acknowledged, "It is true that the South Korean stock market is significantly undervalued," but expressed concern about rapid increases.
He identified factors contributing to stock market undervaluation, including corporate governance, market transparency, geopolitical risks, and uncertainties in industrial economic policies. He noted, "The culture of respecting shareholders and issues of abuse of managerial control remain challenges, and I will receive a comprehensive report soon and take necessary actions."
President Lee also instructed the Serious Crimes Investigation Agency to respond rigorously to white-collar crimes and securities and financial offenses. He stated, "It is the government's responsibility to ensure that the stock market regains trust and returns to its rightful place through a correction process."
He announced that the application for membership in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) would be postponed until there is sufficient dialogue with the agriculture, fisheries, and livestock sectors. He remarked, "Expanding our economic territory is a national task that cannot be avoided, but we will delay the application until the end of this year and present alternatives that the government can accept after listening to farmers' groups."
Regarding the transfer of wartime operational control, he expressed that terms like 'recovery' or 'return' are more appropriate than 'transition.' He stated, "Military sovereignty is a core component of the nation. We must recover wartime operational control as soon as possible, and we can certainly do so. Discussions with the U.S. are fundamentally moving in the direction of returning control."
President Lee affirmed his intention to continue using social media for communication and to live-stream some Cabinet meetings. He stated, "In the future, I plan to increase communication with you and diversify communication channels. Without social media, would there have been a President Lee Jae-myung? Direct communication with the public is like a lifeline for politicians."
* This article has been translated by AI.
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