United Future Party's 'Real Estate Fact Check'... "Not the 3 Real Estate Laws but the Moon Jae-in Government is the Main Cause of the Surge"

[Image source=Yonhap News]

[Asia Economy Reporter Lee Ji-eun] The ruling party cited the 'Real Estate 3 Acts' passed in 2014 as the cause of the real estate surge, prompting the United Future Party to unusually launch a 'fact check,' stating that this is "not true."

On the 31st, the United Future Party's Policy Committee said in a press release, "The biggest cause of the surge in housing prices and jeonse prices in Seoul and the metropolitan area is the Moon Jae-in administration's one-sided real estate mismanagement of 'strengthening regulations and suppressing supply,'" adding, "The claim by some that the flexible application of the price ceiling system under the Park Geun-hye administration caused side effects six years later under the Moon Jae-in administration is no longer worth mentioning."

They argued that the Real Estate 3 Acts, which the ruling party and some media claim to be the cause of the real estate surge, are not the culprit. The Real Estate 3 Acts refer to ▲abolition of the price ceiling system in private land ▲a three-year grace period for the recovery of excess profits from reconstruction ▲allowing three houses per union member. Previously, MBC's 'Straight' named the Real Estate 3 Acts, led and passed by the Saenuri Party, the predecessor of the United Future Party, in 2014 as the main culprit of the real estate surge.

Kim Tae-nyeon, the floor leader of the Democratic Party of Korea, also accepted this claim, pointing out that "the Real Estate 3 Acts are the cause of the surge in the apartment housing market," and a hashtag campaign was launched among ruling party supporters, accusing Joo Ho-young, the floor leader of the United Future Party who supported the Real Estate 3 Acts at the time, of gaining a market price difference of 2.3 billion won.

However, the United Future Party dismissed the ruling party's claims, stating, "The Moon administration announced real estate policies including 22 rounds of regulatory strengthening and punitive taxation over the past three years, and the real estate market reacted to the fear of supply-demand imbalance, causing a 'panic buying' phenomenon."

In particular, the Real Estate 3 Acts were handled through bipartisan agreement at the time, and if the Real Estate 3 Acts are problematic, the current ruling party cannot be free from responsibility either. The United Future Party's Policy Committee said, "The claim that the Real Estate 3 Acts, passed in the plenary session on December 29, 2014, caused the surge in housing prices shows a lack of understanding of the real estate market at the time," adding, "They were passed through bipartisan agreement, and Jo Jung-sik, then a member of the New Politics Alliance for Democracy and currently the chair of the Democratic Party's Policy Committee, also voted in favor of all the Real Estate 3 Acts."

Fact Check by the United Future Party Policy Committee

They also explained that the details of the Real Estate 3 Acts were not laws that caused the real estate surge. The United Future Party's Policy Committee said, "Regarding the price ceiling system, many experts say it is a system that can cause various problems such as distortion of the housing market and a decline in investment in advanced housing industry technologies," adding, "The grace period for the recovery of excess profits from reconstruction was also necessary because, in September 2014, the Hannam Yeonlip Reconstruction Union filed a constitutional complaint arguing that imposing reconstruction charges infringed on private property rights, causing controversy."

The United Future Party emphasized, "If the reconstruction permits had been missed at the time and construction had not started promptly, quality housing supply would not have been possible, and real estate prices would have surged even more under the Moon Jae-in administration," stressing that the annual average supply of 40,000 houses from 2017 to 2020 was due to the permits from the previous administration. The United Future Party expects a supply cliff with 23,000 houses in 2021 and 13,000 houses in 2022.

Regarding Minister of Land, Infrastructure and Transport Kim Hyun-mi's claim that the price ceiling system implemented during the Roh Moo-hyun administration stabilized housing prices during the Lee Myung-bak administration, they disagreed, stating, "The success of the Lee Myung-bak administration's real estate price stabilization (-3%) was achieved by signaling to the market that good houses would be continuously supplied in good locations," adding, "On the contrary, real estate prices surged due to various regulatory policies, including the price ceiling system, implemented during the Roh Moo-hyun administration."

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