청, Real Estate 'Supply' Plan... Greenbelt Pause, Reconstruction Boundary Set

Review of 'Greenbelt Deregulation' Underway but Feasibility Questioned... Urgent Need to Calm Real Estate Anxiety

[Asia Economy Reporter Ryu Jeong-min] “We are reviewing all alternatives for now, but no conclusion has been reached yet...” What a senior Blue House official told reporters on the 19th reflects the Moon Jae-in administration’s dilemma over lifting the development restriction zone (Greenbelt).

They are considering various options to quell real estate anxiety, among which is the lifting of the Seoul Greenbelt. The problem lies in the anticipated backlash when the Greenbelt lifting card, perceived as a ‘drastic measure,’ is actually played.

Considering Seoul’s situation, options to secure large-scale housing sites are limited. If the Greenbelt lifting card is not used, it is practically difficult to secure large-scale housing sites in Seoul. If the Greenbelt is lifted, space to supply large-scale apartments in Seoul can be secured.

Archive photo / Photo by Mun Ho-nam munonam@

However, considering the positive functions of the Seoul Greenbelt, it is a choice that entails considerable risk, which is the source of concern. It could further fuel controversy with opposition from environmental groups, negative views from the Seoul city government, resistance from local residents, and debates over pros and cons inside and outside the political sphere.

This is why the Blue House does not rule out the Greenbelt lifting card but shows cautious views on its implementation. A senior Blue House official assessed, “It is a matter that requires a comprehensive look at the effects and various costs that the (Greenbelt lifting) measure would entail.”

As real estate anxiety emerged as an issue, President Moon Jae-in’s approval rating dropped, delivering a direct blow to state governance. Although the Blue House states it will not be swayed by changes in approval ratings, its inner thoughts are complicated. With less than a year and eight months left until the next presidential election, once the momentum of governance is broken, recovery itself may become impossible.

Considering the reality of the fourth year of the term, an approval rating in the 40% range is not necessarily low, but securing governance momentum is crucial to vigorously push forward the grand design for Korea’s future, such as the ‘Korean New Deal.’

[Image source=Yonhap News]

A noteworthy point is that the Blue House is trying to combine a ‘carrot’ policy of expanding supply alongside the ‘stick’ approach of strengthening real estate taxation. This implies a willingness to approach problem-solving through expanding real estate supply even without lifting the Greenbelt.

This is a different trend from the early Moon Jae-in administration’s stance that “there is no shortage of apartment supply in Seoul.” However, the Blue House draws a line on supply expansion through reconstruction and redevelopment, which the real estate market is paying attention to.

Local assembly members and local government heads emphasize the need to ease regulations on reconstruction and redevelopment, reflecting the demands of local residents, but the Blue House is more concerned about the negative effects than the positive ones.

The Blue House is expected to continue consultations with the government and ruling party to find solutions to quell real estate anxiety. With the ‘COVID-19’ pandemic causing circulating funds that lost investment destinations to turn to real estate, the Blue House’s concerns inevitably deepen.

A senior Blue House official pointed out, “(Considering interest rates) there is an abundance of very cheap money circulating in the market right now,” adding, “From the perspective of managing the macroeconomy, we cannot just let liquidity run rampant, driving up real estate prices and causing speculation.”

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