"Moon Administration Promised to Curb Gap Investment... Seoul Saw a Threefold Increase Over 4 Years"

Seoul Gap Investment 14.3% in Sep 2017 → 41.9% in Jul 2021
Crackdown on Speculation Throughout Term Proved 'Useless', Gangnam 4 Districts Remain Strong
Focus Only on Gap Investment Form, Need to Consider Whether Real Buyers Secure Homes

Real estate stock photo / Photo by Mun Ho-nam munonam@

Gap investment, which the Moon Jae-in administration identified as a cause of real estate speculation, has increased even more during its term. In Seoul alone, it has nearly tripled over the past four years.

On the 3rd, Kim Sang-hoon, a member of the People Power Party, analyzed the Ministry of Land, Infrastructure and Transport’s ‘Status of Seoul City Funding Plans over the Last 5 Years’ and found that from September 2017 to July 2021, the ratio of gap investment (*lease after deposit succession) compared to the number of purchases in Seoul increased every year.

The gap investment ratio, which was 14.3% in September 2017, rose to 33.1% in January 2018, dropped to 13.7% in February 2019, but surged again to 32.4% in November of the same year. In 2020, it fluctuated slightly but reached 38.4% in December, and in 2021, it has been recorded in the 40% range from the beginning of the year through July.

During this period, Seoul’s gap investment ratio showed a steady increase followed by sharp declines, mostly right after the government announced real estate measures. After the August 2017 8.2 measures were announced, the gap investment ratio in September was only 14.3%, and during the September 13, 2018 measures announcement, it dropped from 30.9% in September to 19.9% in October.

Before the December 16, 2019 measures announcement, the ratio was 32.4% in November, but after the announcement, it fell to 25.3% in January 2020, breaking the upward trend. The June 17, 2020 measures also saw the gap investment ratio drop from 31.6% in June to 25.8% in July. After the February 4, 2021 3080 supply measures, the trend repeated, falling from 40.3% to 31.0%.

However, the effects of these measures were short-lived, and within a few months after each announcement, the gap investment ratio ‘recovered’ or exceeded previous levels.

In fact, the gap investment ratio in July this year surged to 41.9%. In May, it even reached a record high of 43.7%.

The gap investment ratio in Gangnam, a key management area designated by the government, showed the same pattern. Starting at 21.4% in September 2017, the Gangnam 4 districts’ gap investment ratio soared to 48.3% in January 2018. Although it declined following measures, it returned to above 40% each time: 47.3% in September 2018, 43.3% in July 2019, 44.7% in June 2020, and 44.9% in July 2021.

Assemblyman Kim said, “During the five years of the Moon Jae-in administration, countless policies were released to curb gap investment, causing inconvenience to the public, but ultimately it returned to the original level and recently even increased,” adding, “It was all wasted effort over five years.”

He continued, “By equating actual demand with speculation, ignoring the field, and making it even harder to own a home,” he criticized, “clumsy policy experiments only multiplied the suffering of the people.”

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