Lee Min-hyung joined The Korea Times in 2014 and has worked as a journalist mainly in Korea’s finance, tech and automotive industry. He specializes in content creation, breaking news and in-depth analysis currently on transportation and mobility. You can reach him via mhlee@koreatimes.co.kr.
Gov't to introduce 'much stronger' real estate regulations
Reporters raise their hands to ask questions to President Moon Jae-in during his New Year's press conference broadcast live, at Cheong Wa Dae in Seoul, Tuesday. Yonhap
By Lee Min-hyung
Moon's blind faith in regulations leaves much to be desired
By Lee Min-hyung
The government will introduce “much stronger” regulations to bring soaring housing prices back to their original state beyond stabilizing the overheated real estate market, President Moon Jae-in said in a New Year's press conference, Tuesday.
“My view is that (the real estate policy) should be not be centered on stopping housing prices from rising further, but driving down the prices in some (speculation-ridden) areas,” Moon told reporters.
He pledged to keep coming up with far more intense measures to end real estate speculation.
Speculative capital has a tendency to continue finding “indirect speculation routes” for some time after the government introduces regulations, according to the President.
“For this reason, the incumbent administration will not cease to come up with much stronger measures when it sees the previous and existing regulations do not work any longer,” Moon said.
Economists and market experts, however, voiced their consensus that such “blind faith” in regulations would never become a solution to calm the overheated housing market in the long run.
“The government remains near-sighted in its real estate policy in that it continues to believe that the regulations are a cure-all to stabilize housing prices,” Kwon Dae-jung, a professor of real estate studies at Myongji University, said.
“The market appears to freeze shortly after the government announces new regulations,” he said. “But such measures end up creating temporary effects on the market.”
He remained dubious over why the government has not taken steps to increase supply in the capital area.
“To curb the soaring prices in Seoul, expanding supply is the only way, as demand will continue to remain high,” he pointed out.
Sung Tae-yoon, an economist at Yonsei University, urged the administration to face the facts without sticking to blind optimism for the nation's economic rebound in 2020.
“The government highlights that the housing price across the nation has not risen steeply, but this has little to do with its policy drives, including a series of its recent regulations,” he said. “This has much to do with the prolonged economic slowdown here.”
The expert said Moon should have made remarks on the government's specific strategies to rev up the economy, rather than focusing his speech on the rosy outlook for a possible economic rebound here.
Korea University economist Kang Sung-jin also said Moon failed to share detailed roadmaps to revitalize the sagging economy in 2020.
“During the press conference, he ended up expressing confidence over the local economic growth only by citing some statistical data backing up his blind optimism,” he said.
“But the reality is different. Moon should have unveiled strategies to reactivate the economy particularly in the private sector,” the expert said. “His press conference left many questions unanswered in terms of what the government will do this year in a specific and concrete manner for the economy.”