Minister Noh Hyung-wook: "Past Policies Failed to Reflect Market Demand... Current Bubble Concerns" (Comprehensive)

[Asia Economy Reporter Kangwook Cho] Minister of Land, Infrastructure and Transport Noh Hyung-wook acknowledged that past real estate policies failed to reflect market demand. However, he warned that the current market faces a more serious asset bubble than during the financial crisis due to excess liquidity caused by COVID-19, and that individuals who have over-leveraged themselves with ‘Yeongkkeul’ investments beyond their capacity must take responsibility.

At his first press briefing since taking office on the 5th at the Government Sejong Convention Center in Sejong City, Minister Noh said, "The volume of housing supplied under the current administration was by no means insufficient, but there were mismatches with public demand." He explained that although supply was focused on provincial areas and new towns on the outskirts of the metropolitan area, actual market demand was concentrated in urban centers, and even within urban demand, perspectives on housing affordability varied depending on location. Therefore, tailored and segmented measures according to each demand became necessary. While acknowledging that the overall supply volume was not problematic, he admitted there were errors in detailed policies.

He added, "The public sector cannot cover all areas of the market; some parts must follow market logic while others require public intervention. Just because the total supply is sufficient does not mean there is no problem, so we are making efforts to understand what the market demand actually is." This is interpreted as a correction of the current administration’s real estate policy, which had emphasized only the role of the public sector.

However, Minister Noh expressed the same stance on the government’s repeated warnings about the peak of real estate prices and voiced concerns about ‘Yeongkkeul’ real estate investments.

He said, "Many experts predict that the current upward trend in housing prices will normalize soon. Whether it happens quickly or in two to three years cannot be stated definitively, but if asset price adjustments occur, those who have invested beyond their means through Yeongkkeul, gap investments, or chasing purchases will face very difficult situations." He warned, "Currently, the disparities are too wide, so downward stabilization is necessary. If such a situation arises later, individuals must take responsibility for their investments."

Minister Noh also sent a warning message to a kind of market resistance force.

He pointed out, "There is much market resistance when trends change. Even when the government announces real estate stabilization measures and monetary authorities signal interest rate hikes, there is a market expectation that it will not happen."

He further stated, "If asset prices continue to rise as they are now, it is undesirable even from a market economy perspective. I hope market participants will observe international situations and make neutral judgments." He added, "We are not hoping for a housing price crash but for a stable scenario."

Along with this, Minister Noh said, "The best way to alleviate the public’s housing anxiety is to establish a stable foundation that allows continuous housing supply," and pledged, "We will steadily implement the 2.4 Plan to dramatically expand housing supply within urban areas based on close cooperation with local governments."

To this end, the government plans to start pre-subscriptions for the 3rd phase new towns, which are of high interest to newlyweds in the metropolitan area, beginning on the 15th with the Incheon Gyeyang district, aiming to supply more than 30,000 units within the year to allow early tangible results in housing supply. Additionally, previously announced public land will be supplied without delay through cooperation with local governments, and 130,000 new public land units, delayed due to speculative investigations, will be announced sequentially after the end of August.

He said, "To protect safety and lives at construction sites, we will consider effective policies that can actually be implemented on-site rather than simply strengthening existing regulations or penalties." He plans to improve systems focusing on on-site implementation by analyzing problems at each stage of demolition work, establish a continuous monitoring system involving public participation, and conduct special on-site inspections. Furthermore, he intends to conduct a large-scale survey on illegal subcontracting to address root causes, promote joint construction safety campaigns with the industry and government, and carry out significantly expanded on-site inspections this year without fail.

Minister Noh stated that to innovate the land and transport industry, a strategy to expand BIM (Building Information Modeling), the key to digital innovation in construction, will be prepared. In logistics, efforts will be made to transform it into a high value-added industry through the creation of digital logistics pilot cities, establishment of smart logistics center certification systems, and development of e-commerce logistics complexes.

He emphasized, "The parcel delivery industry, which has become an essential industry, will be actively supported for qualitative growth that embraces its workers," adding, "Since a social agreement to prevent overwork of delivery workers was reached last month on the 22nd among online shopping malls, delivery companies, consumer groups, the National Assembly, and the government, we will spare no support to ensure faithful implementation on the ground."

Alongside this, Minister Noh announced plans to actively promote reducing traffic accident fatalities, national balanced development, and expansion of transportation infrastructure.

He stressed the attitude of ‘Ichungdeuksim (以聽得心)’, meaning winning hearts by listening. Minister Noh said, "Given the heavy responsibilities of the Ministry of Land, Infrastructure and Transport, we are well aware that past policy implementation did not meet the public’s expectations," and pledged, "We will prioritize ‘public service ethics innovation’ for internal members and promote ‘communication innovation’ to listen to voices from the field and win the hearts of the people."

Finally, Minister Noh emphasized, "In the current domestic and international crisis, to restore public trust and turn the crisis into an opportunity, we must treat this as the Ministry of Land, Infrastructure and Transport’s last chance for survival with a desperate mindset, gather all wisdom and capabilities along with voluntary innovation from ministry members, and solve many pending issues," promising, "We will produce tangible results that the public can feel based on the changes our government has pursued so far."

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