[Column] Real Estate 'Gongyak' Blinded by Tables

[Asia Economy Reporter Lee Chun-hee] "How is this different from existing policies?" At the Democratic Party of Korea's real estate pledge announcement held at the National Assembly on the 29th, questions about the differences from existing policies poured in one after another. Since President Moon Jae-in has emphasized youth housing issues, there was interest in the ruling party's pledges, but most of the content was exactly the same as the government's measures.

The Democratic Party was the last among major parties to unveil its real estate policy card, but rather than a hidden card, it has been criticized as a copy of government policies. Even looking at the '100,000 customized urban housing units for youth and newlyweds,' the actual increase in supply was only 10,000 units. The remaining 90,000 units are allocations of already decided housing to youth and newlyweds. Moreover, a significant portion of this supply is just a 'hopeful plan' to utilize the Korail Yongsan Station area site, for which development directions have not even been established. Experts also point out that the newly introduced profit-sharing mortgage is a similar product to existing policy mortgages, with little differentiation in interest rates or repayment periods.

Earlier, opposition parties competitively presented real estate pledges that were largely 'empty promises' aimed at winning votes. The Liberty Korea Party proposed plans to completely reset current government regulations, such as easing reconstruction and redevelopment regulations and abolishing the price ceiling system for sale prices. The market warns that if these pledges are implemented, they could cause enormous side effects in the market, comparable to excessive regulations. The already soaring housing prices could spiral out of control.

Minor parties have sought to attract votes with policies detached from reality. The Justice Party pledged to mandate the prohibition of multiple home ownership by high-ranking officials, provide 200,000 KRW monthly to youth renting households, extend lease contracts twice over three years, and implement rent caps on jeonse and monthly rent. The Party for Democracy and Peace also declared plans to supply 1 million 20-pyeong apartments at 100 million KRW each. Even Seoul Mayor Park Won-soon introduced a 'real estate sharing fund' ahead of the election.

The ban on multiple home ownership has a high risk of being unconstitutional, similar to the housing transaction permit system. The rent cap system raises concerns that in a 'hot market' where rents are rising, it could lead to short-term rent spikes. The 100 million KRW apartment policy is criticized as unrealistic when considering land prices and site conditions.

Furthermore, Democratic Party floor leader Lee In-young even proposed, "Let's pledge the (real estate) policy direction and bills in the general election and accept the results to decide whether to process the bills." Ultimately, regardless of party, real estate is being viewed only as an election tool to gain one more vote without economic consideration. It is regrettable that it seems difficult to expect a change in the political approach to housing as an economic issue rather than a political battleground in this general election as well.

This content was produced with the assistance of AI translation services.