Hong Nam-ki: "Real Estate Policy Supplementation, Rapid Party-Government Consultations Needed to Reduce Uncertainty"

Ministry of Economy and Finance Expanded Executive Meeting

[Image source=Yonhap News]

[Sejong=Asia Economy Reporter Son Sun-hee] Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, said on the 24th, "Regarding the recent partial adjustments to real estate policies, the ruling party and the government must conduct consultations more swiftly to minimize instability and uncertainty in the real estate market."

Deputy Prime Minister Hong made these remarks while presiding over an expanded meeting of senior officials at the Ministry of Economy and Finance at the Government Complex Sejong in the afternoon. Amid the rising trend in real estate prices following the April 7 by-elections, Hong repeatedly emphasized, "Considering this year's housing supply volume (260,000 to 280,000 units in the metropolitan area, about 50,000 units in Seoul), the pre-sale volume for the second half of this year and next year (30,000 units in the second half + 32,000 units next year), and the experience of a partial adjustment process after rapid real estate price surges, I request a prudent decision."

The real estate price adjustment mentioned by Deputy Prime Minister Hong refers to the period during the 1998 International Monetary Fund (IMF) foreign exchange crisis when nationwide housing sale prices fell by 12.4% compared to the previous year. Additionally, during the global financial crisis, apartment prices in Seoul declined by 11.2% from September 2008 to August 2013.

Although the Ministry of Economy and Finance has repeatedly emphasized the need for "prompt consultations" regarding real estate taxes such as the comprehensive real estate holding tax and capital gains tax, internal party consensus has not been reached, causing delays. The Democratic Party of Korea initially planned to hold a party meeting on real estate policy on the 25th to consolidate party opinions but reportedly postponed it to the 27th. After the by-election defeat, there were opinions to partially ease the comprehensive real estate holding tax, which had excessively expanded its tax base, but some within the party strongly oppose it, calling it a "tax cut for the rich."

Meanwhile, regarding the upcoming National Fiscal Strategy Meeting scheduled for this week, Deputy Prime Minister Hong said, "Fiscal policy is a 'numerical expression of policy,' and tax and budget formulation work is a process that interacts with policy and supports it. Therefore, it is not merely a process of setting revenue and budget figures but involves designing the policy framework well and communicating effectively with policy recipients. I ask that this be carried out more meticulously than ever."

He also urged Ministry of Economy and Finance officials, who are policy stewards, to be even more vigilant from the perspectives of fairness and integrity concerning the land speculation scandal involving some employees of the Korea Land and Housing Corporation (LH), which sparked public outrage.

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