Kang Seung-woo is the Business Desk editor at The Korea Times. Prior to this position, he covered politics, national affairs, finance and sports.
Ruling bloc's optimism over housing market stabilization leaves many baffled
Lee Jae-myung, the presidential candidate of the ruling Democratic Party of Korea, speaks during his New Year press conference at a Kia plant in Gwangmyeong, Gyeonggi Province, Tuesday. Yonhap
By Kang Seung-woo
By Kang Seung-woo
The ruling bloc is confident that soaring housing prices are under control, after the issue has dragged down approval ratings for the Moon Jae-in administration and the Democratic Party of Korea (DPK).
However, the government's assurances are raising eyebrows among market experts and the general public, because the Moon government's repeated real estate policy failures are to blame for the sky-high housing prices.
“Cheong Wa Dae feels sure that housing prices are starting to come under control,” Park Soo-hyun, the senior presidential secretary for public relations, said in a radio interview, Tuesday.
His remark comes one day after President Moon Jae-in said in his New Year speech that the government would speed up the supply of housing for end-users while maintaining a downward trend in housing prices.
“The President vowed not to pass the problem on to the next administration, which means that the government has established the groundwork for providing a total of 2.05 million housing units by 2025,” Park said.
The senior secretary said the COVID-19 pandemic has affected the economy and directly caused the rise in property prices, stressing that the policy for real estate is a long-term and comprehensive one.
Along with the presidential office's rosy outlook, Lee Jae-myung, the DPK presidential candidate, also said, Tuesday, that the nation is now at a crucial point where it should brace for a sharp plunge in housing prices.
“If housing prices plummet unexpectedly, it will be helpful in stabilizing the market by setting a certain line as a reference point and using it as an opportunity to secure public housing,” Lee said during his New Year press conference in Gwangmyeong, Gyeonggi Province.
“The real estate issue is now going through an inflection point, as experts predicted.”
The nations' housing prices have risen sharply in recent years, even though the Moon government issued an astonishing 26 policies to try to cool down the red-hot property market. People have been taking out loans to buy homes in anticipation of further rises in home prices.
The growth of housing prices has slowed since September amid tighter lending rules and the Bank of Korea's interest rate hikes, but the housing market remains unstable due largely to an imbalance of housing supply and demand.
However, unlike the ruling party's opinion, economic research institutes expect housing prices to continue to grow in 2022.
The Korea Housing Institute forecast housing prices to increase by 2.5 percent for this year, while the Construction and Economy Research Institute of Korea estimates prices will rise by 5 percent.
Citizens also showed skepticism and aired sarcastic reactions to the ruling bloc's predictions regarding the housing market.
“Home prices rose by 1 billion won during Moon's term and now fell by 100 million won ― would you call that a 'drop' or 'stabilization' of housing prices?” an internet user wrote on Naver.