Last Year’s Failure to Control Housing Prices by President Moon... Will He Propose a 'Supply Plan' at the New Year's Press Conference?

President Moon Jae-in's New Year's Press Conference on the 18th
Attention on Remarks Regarding Real Estate
Last Year, Strong Statements Like 'Restoration of Housing Prices'
This Year, Focus Likely on Expanding Housing Supply

President Moon Jae-in is delivering a New Year's address at the Blue House on the 11th. (Photo by Yonhap News)

[Asia Economy Reporter Moon Jae-won] President Moon Jae-in will hold a New Year's press conference on the 18th to announce the direction of state administration in the fifth year of his term. At this event, he is also expected to mention his stance and direction on additional real estate measures. Given that the government has recently been sending continuous signals about 'expanding housing supply,' there is analysis that more concrete plans may be discussed.

According to political circles on the 16th, President Moon will conduct the New Year's press conference for about 100 minutes starting at 10 a.m. on the 18th at the Blue House Chunghwacang. He plans to freely receive and answer questions from 20 reporters attending in person and 100 reporters connected via video link on topics including the economy, quarantine and society, politics, and foreign diplomacy and security.

The industry’s attention is focused on what President Moon will say regarding real estate issues this year. At the New Year's press conference held on January 14 last year, President Moon made strong remarks such as 'restoring housing prices to their original state,' which put the real estate market on edge. At that time, he repeatedly expressed his determination to stabilize housing prices, saying, "We will continuously introduce stronger (real estate) measures," and "We will definitely control real estate during our government’s term."

In particular, President Moon said, "In some areas, there has been a rapid price increase to the extent that ordinary citizens find it hard to accept and feel a sense of alienation," and added, "I think such price increases should be restored to their original state." This was the first time President Moon presented a specific goal for market stabilization. Therefore, there was analysis that ultra-strong additional measures targeting areas like Gangnam, which have led the rise in Seoul housing prices under the current administration, would be introduced.

In fact, as President Moon confidently promised, the government announced several strong real estate measures last year. However, these measures ultimately failed to curb housing prices. According to the nationwide housing price trend survey released by the Korea Real Estate Board, the nationwide housing price increase rate, including apartments and detached houses, was 5.36% last year, marking the highest in nine years since 2011. The rapid surge in housing prices over a short period worsened asset polarization, and new terms such as 'byeorakgeoji' (sudden poverty), 'real estate blue' (real estate depression), and 'isaengjipmang' (it's hopeless to buy a house in this life) were coined.

This year, President Moon is expected to focus more on expanding housing supply at the New Year's press conference, unlike last year. This is because public opinion worsened due to the continued regulatory approach last year, and housing price instability caused by various side effects was severe. In fact, in his New Year's address on the 11th, President Moon said, "We will especially focus on expanding supply and swiftly prepare various housing supply plans that can quickly show effects." This aligns with his statement at the first Cabinet meeting of the new year on the 5th, where he said, "Above all, we will focus on swiftly preparing innovative and diverse housing supply plans."

The Ministry of Land, Infrastructure and Transport and the Ministry of Economy and Finance are also preparing measures focused on expanding new housing supply. Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, emphasized at the real estate market inspection meeting of related ministers on the 15th, "In 2021, we will firmly maintain the policy stance of blocking speculative demand and protecting actual demand while making every effort to secure available housing supply."

Accordingly, there is speculation that the Seoul downtown housing supply expansion plan, which the government will announce before the Lunar New Year holiday, will include a larger volume of supply than expected. President Moon may mention more specific details related to this at the New Year's press conference. Currently, the government is discussing plans such as public-led development of semi-industrial areas and low-rise residential areas, high-density development around subway stations, revitalization of small-scale housing maintenance projects, and supply of public-owned housing with land lease.

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