President Lee Jae-myung stated on September 18 that the government's primary task is to move South Korea beyond being a "real estate speculation republic" and to increase housing supply as quickly as possible through land development and urban renewal projects.
During a press conference at the Blue House, President Lee responded to questions about the declining housing prices in the three districts of Gangnam while prices in northern Seoul are rising rapidly, increasing the burden on the middle class and low-income families. He asserted, "We will take all possible measures in regulations, supply, and taxation, so the real estate market will gradually stabilize."
He identified the concentration of economic power, infrastructure, jobs, and educational and cultural conditions in the capital region as the fundamental cause of housing price instability. This concentration leads to high housing demand while the supply of homes and land remains limited.
"The answer lies in the cause," he emphasized, stating that the government is committed to a policy of balanced national development. He plans to encourage corporate investment in local areas, redistribute finances to regions, and expedite the construction of an administrative capital along with the relocation of central government agencies and public enterprises to invigorate local economies.
President Lee also pointed to the long-standing "real estate invincibility myth" as a significant factor contributing to the issue. He explained that the relative deprivation felt by those unable to acquire property, coupled with the fear of missing out on real estate asset appreciation, fuels demand for home purchases.
He criticized past government policies for exacerbating this trend, including initiatives that encouraged people to buy homes with debt and tax cuts aimed at increasing housing demand, which he claims intensified the concentration of real estate.
In the short term, he noted that reduced housing supply and expanded lending have contributed to rising prices. He claimed that since the Yoon Suk-yeol administration took office in 2022, the number of building permits and construction starts has significantly decreased, and the lifting of land transaction restrictions has led to sharp price increases in certain areas.
Regarding the contrasting housing price trends in Gangnam and outer regions, he stated, "The decline in Gangnam is beginning to spread, while outer areas are rising, indicating a sort of flattening process."
He emphasized the need for project-specific checks to expand supply, stating, "The Prime Minister's office is monitoring this daily, and I receive weekly reports to verify progress at specific locations." He noted that the number of building permits is increasing, with related data to be released soon.
While expanding financial support for housing supply, he expressed his intention to maintain existing lending policies on the demand side. He addressed criticisms regarding the expansion of finance while pursuing housing price stability, stating, "That is a targeted policy," and emphasized that they are maximizing financial support in areas that can increase housing supply.
He also pledged to expedite the relocation of public enterprises and national agencies to Sejong, asserting, "Many have tried but failed. However, I can assure you that this government will succeed," reiterating his commitment to stabilizing the real estate market. He added that detailed policies are being developed to address the difficulties faced by tenants.
* This article has been translated by AI.
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