"Is the president living in a different world?"
Seoul Mayor Oh Se-hoon directed sharp criticism at President Yoon Suk-yeol's assessment of the real estate market in a Facebook post on November 3. He argued that the president's focus on price declines in high-end homes and measures to counter significant drops in housing prices are disconnected from the reality faced by citizens amid rising apartment prices and rental instability in Seoul.
Oh Se-hoon stated, "While everyone is struggling to put out the fire at their feet, the president is acting as if he is preparing for a flood." He criticized not only the housing market assessment but also the responsibilities surrounding loan and residency regulations, supply shortages, and the role of policy advisors.
Earlier that day, President Yoon mentioned in a Cabinet meeting that actual transaction prices in key areas are dropping significantly, citing an increase in listings and a decrease in transaction volumes. However, he added, "Of course, there are areas where this is not the case." He later indicated on X (formerly Twitter) that the government is considering measures, including large-scale purchases of homes for public rental housing, in response to potential significant price drops. His comments distinguish between the ongoing decline and preparations for future downturns.
The central issue raised by Mayor Oh is whether the president's emphasis on declining signals can adequately explain the overall housing burden in Seoul. He pointed out that even if prices adjust in high-end Gangnam homes, if prices and rents in non-Gangnam areas continue to rise, the market experience for those without homes or renters will not change significantly.
The increase in listings also requires a regional perspective. Real estate information firm Asil reported that the number of apartment listings in Seoul reached 77,451, a 35.8% increase from the beginning of the year. However, during the same period, listings in Jungnang, Dobong, and Geumcheon districts decreased by 28.7%, 27.9%, and 25.2%, respectively. Thus, the overall increase in listings does not necessarily mean that buyers have more options across all regions.
A decrease in transactions does not automatically indicate price stabilization. The interpretation and response depend on whether the decline is due to difficulties in financing or buyers postponing purchases in anticipation of price drops. Mayor Oh emphasized that the situation where purchasing homes has become difficult due to loan restrictions should not be evaluated as price stabilization.
Oh argued that the government's focus on residency-based regulations has fueled a "triple increase" in both sale prices and rental prices. However, the causal relationship between regulations and rising rents must consider factors such as supply volume, interest rates, and regional demand. It is clear that the mere decline in some high-end homes cannot be seen as a solution to the housing cost burden for renters.
In contrast, Mayor Oh claimed that 389 redevelopment areas were released during the tenure of former Mayor Park Won-soon, resulting in the loss of opportunities to supply 430,000 housing units. He argued that he has been restoring the supply base through re-designation of areas and improving project viability, countering the notion that the recovery of permits is solely a success of the current administration. However, the 430,000 units mentioned by Oh represent potential supply and should be distinguished from actual permits, construction, and occupancy figures.
Oh also called for a renewal of the policy advisory team, stating that the president needs advisors who can convey the realities that must be addressed rather than just the forecasts he wants to hear. He emphasized that responses to immediate rental instability should not be overlooked, given that it takes time for the effects of expanded supply to materialize.
In response, President Yoon refuted criticisms by stating that he never claimed housing prices were plummeting. Ultimately, the crux of this conflict goes beyond the terminology of "plummeting." In a market where prices are falling in Gangnam while rising in non-Gangnam areas, the key question is what the government prioritizes in its policy decisions and how it plans to alleviate citizens' housing cost burdens.
Seoul Mayor Oh Se-hoon directed sharp criticism at President Yoon Suk-yeol's assessment of the real estate market in a Facebook post on November 3. He argued that the president's focus on price declines in high-end homes and measures to counter significant drops in housing prices are disconnected from the reality faced by citizens amid rising apartment prices and rental instability in Seoul.
Oh Se-hoon stated, "While everyone is struggling to put out the fire at their feet, the president is acting as if he is preparing for a flood." He criticized not only the housing market assessment but also the responsibilities surrounding loan and residency regulations, supply shortages, and the role of policy advisors.
Earlier that day, President Yoon mentioned in a Cabinet meeting that actual transaction prices in key areas are dropping significantly, citing an increase in listings and a decrease in transaction volumes. However, he added, "Of course, there are areas where this is not the case." He later indicated on X (formerly Twitter) that the government is considering measures, including large-scale purchases of homes for public rental housing, in response to potential significant price drops. His comments distinguish between the ongoing decline and preparations for future downturns.
The central issue raised by Mayor Oh is whether the president's emphasis on declining signals can adequately explain the overall housing burden in Seoul. He pointed out that even if prices adjust in high-end Gangnam homes, if prices and rents in non-Gangnam areas continue to rise, the market experience for those without homes or renters will not change significantly.
Gangnam Prices Drop While Non-Gangnam Prices Rise: The Dual Faces of 'Seoul Housing Prices'
According to statistics from the Korea Real Estate Agency, apartment prices in Seoul rose by 0.09% in the last week of October, marking the 90th consecutive week of increases. Prices increased in 22 out of 25 districts, excluding the three districts of Gangnam. Areas with relatively lower prices, such as Seongbuk, Seodaemun, Gangbuk, and Dobong, showed notable upward trends. This indicates a market where price adjustments in Gangnam coexist with overall price increases in Seoul.The increase in listings also requires a regional perspective. Real estate information firm Asil reported that the number of apartment listings in Seoul reached 77,451, a 35.8% increase from the beginning of the year. However, during the same period, listings in Jungnang, Dobong, and Geumcheon districts decreased by 28.7%, 27.9%, and 25.2%, respectively. Thus, the overall increase in listings does not necessarily mean that buyers have more options across all regions.
A decrease in transactions does not automatically indicate price stabilization. The interpretation and response depend on whether the decline is due to difficulties in financing or buyers postponing purchases in anticipation of price drops. Mayor Oh emphasized that the situation where purchasing homes has become difficult due to loan restrictions should not be evaluated as price stabilization.
Oh argued that the government's focus on residency-based regulations has fueled a "triple increase" in both sale prices and rental prices. However, the causal relationship between regulations and rising rents must consider factors such as supply volume, interest rates, and regional demand. It is clear that the mere decline in some high-end homes cannot be seen as a solution to the housing cost burden for renters.
"Decrease in Permits Since 2022" vs. "Release of Redevelopment Areas": A Clash Over Supply Responsibility
Both sides have clashed over the responsibility for supply shortages. President Yoon recently stated that the rise in Seoul's housing prices is largely due to a significant decrease in housing permits by local governments starting in 2022, asserting that the current administration has normalized permits and will alleviate the supply cliff around 2028.In contrast, Mayor Oh claimed that 389 redevelopment areas were released during the tenure of former Mayor Park Won-soon, resulting in the loss of opportunities to supply 430,000 housing units. He argued that he has been restoring the supply base through re-designation of areas and improving project viability, countering the notion that the recovery of permits is solely a success of the current administration. However, the 430,000 units mentioned by Oh represent potential supply and should be distinguished from actual permits, construction, and occupancy figures.
Oh also called for a renewal of the policy advisory team, stating that the president needs advisors who can convey the realities that must be addressed rather than just the forecasts he wants to hear. He emphasized that responses to immediate rental instability should not be overlooked, given that it takes time for the effects of expanded supply to materialize.
In response, President Yoon refuted criticisms by stating that he never claimed housing prices were plummeting. Ultimately, the crux of this conflict goes beyond the terminology of "plummeting." In a market where prices are falling in Gangnam while rising in non-Gangnam areas, the key question is what the government prioritizes in its policy decisions and how it plans to alleviate citizens' housing cost burdens.
* This article has been translated by AI.
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