Even in the Final Stretch of the Presidential Election, 'Real Estate' Remains an Issue... Reviewing the Promises of Ruling and Opposition Candidates

Lee, Moon Administration's Real Estate Policy "Clear Failure... Apologize Once Again"
Yoon "Can Real Estate Policy Make 28 Mistakes?"
House Price Polarization Deepened Under Moon Government... Seoul-Regional Apartment Gap '340 Million → 850 Million'

Lee Jae-myung, the Democratic Party presidential candidate (left), and Yoon Seok-youl, the People Power Party presidential candidate.
[Image source=Yonhap News]

[Asia Economy Reporter Heo Midam] As the 20th presidential election approaches, candidates from both ruling and opposition parties have recently been mentioning the 'real estate issue' one after another, putting all their efforts into capturing the last-minute votes.

Lee Jae-myung, the Democratic Party presidential candidate, is reflecting on the current administration's failure in real estate policy and raising his voice, saying, "I will definitely solve the problem." On the other hand, Yoon Seok-youl, the People Power Party presidential candidate, continues to criticize, claiming that the government's failure in real estate policy was intentional. The candidates seem to judge that real estate policy is a variable that will determine public sentiment in a neck-and-neck race.

In a JTBC broadcast speech on the night of the 7th, Candidate Lee bowed his head and said, "It is clearly a policy failure. I will not make excuses. I apologize once again," emphasizing, "We must significantly increase housing supply as much as the market perceives a shortage of supply."

He stated, "From the already announced plan to supply 2.06 million houses, the Lee Jae-myung administration will supply an additional 1.05 million houses," and added, "We must not let the supplied quantity go to those who already own multiple houses. We must also give opportunities to the youth. We will give a 'lightning opportunity,' not a 'lightning poor'."

He then introduced pledges such as ▲30% of supply prioritized for youth ▲100,000 houses supplied to youth on the Yongsan Park site ▲recognition of up to 90% loan-to-value ratio (LTV) and reduction of acquisition and registration taxes.

Lee Jae-myung, the Democratic Party presidential candidate, is appealing for support from voters during a campaign rally held in front of Dunsan Galleria in Seo-gu, Daejeon on the afternoon of the 7th.
[Image source=Yonhap News]

Candidate Yoon has recently been repeatedly mentioning the Moon Jae-in administration's failure in real estate policy during his campaigns in the metropolitan area. This is interpreted as judging that the key to public sentiment in the metropolitan area is the real estate issue.

On the same day in the morning at a campaign in Hanam City, Gyeonggi Province, Candidate Yoon said, "The Democratic Party government changed its real estate policy 28 times. No matter how stupid a person is, can they make 28 mistakes?" He added, "This is because when more people own their homes, they become conservative and do not vote for the Democratic Party. So, they made it difficult for the private sector to build houses by not properly supplying houses to the market."

At a campaign in Ansan City, Gyeonggi Province, he again emphasized, targeting the government and ruling party, "The starting point of their real estate policy is that if people have their own homes, they become conservative and leave the Democratic Party's support base."

The reason why candidates from both parties continue to mention the real estate issue is related to the Moon Jae-in administration's failure in real estate. According to an analysis by the real estate information provider Economy Man Lab of KB Real Estate Live On, in May 2017, when the Moon administration took office, the average apartment sale price in Seoul was 607.08 million KRW, and in the five major metropolitan cities, it was 262 million KRW, with a gap of about 345.08 million KRW.

However, under the current administration, Seoul apartment prices surged sharply, and in December last year, the average apartment sale price in Seoul was recorded at 1.24978 billion KRW, while the five major metropolitan cities were at 397.01 million KRW.

Over the past five years, while Seoul apartment prices soared by 105.9%, the five major metropolitan cities only rose by 51.5%, widening the polarization. In particular, the gap in average apartment sale prices between Seoul and the five major metropolitan cities widened more than twice, from 345.08 million KRW to 852.77 million KRW.

Yoon Seok-yeol, the presidential candidate of the People Power Party, is appealing for support at a campaign rally held on the afternoon of the 7th at Dongtan Central Park in Hwaseong-si, Gyeonggi Province.
[Image source=Yonhap News]

Given this situation, the candidates promised to ease real estate regulations and expand supply. First, Candidate Lee stated his position to quickly supply 3.11 million houses nationwide. This figure includes 1.4 million basic houses in various forms (800,000 rental type + 600,000 sale type). He also pledged to prioritize 30% of new supply for youth purchasing their first home and to expand monthly rent tax credits.

Candidate Lee plans to introduce a rapid consultation system to significantly reduce project periods and rationally improve safety inspection standards. He proposed establishing a new fourth residential zone that allows a floor area ratio of up to 500%, beyond the current third residential zone where construction is limited to a floor area ratio of 300%.

Meanwhile, Candidate Yoon pledged to supply more than 2.5 million houses nationwide (1.3 to 1.5 million in the metropolitan area) during his five-year presidential term.

In his policy pledge book, Candidate Yoon stated about the supply issue, "We will sufficiently supply housing that meets demand to stabilize the market and improve the public's housing standards." To this end, he plans to supply a total of more than 2.5 million houses over five years (1.3 to 1.5 million in the metropolitan area), including ▲470,000 houses through reconstruction and redevelopment ▲200,000 houses through complex development in downtown and station areas ▲180,000 houses through complex development of national/public land and vehicle bases ▲100,000 houses through small-scale maintenance projects ▲1.42 million houses on public land ▲130,000 houses through other means.

He also plans to simplify LTV regulations and switch to a regulation method based on the number of houses owned. For households not purchasing their first home, the LTV cap will be unified at 70% regardless of region to meet the housing purchase demand for upgrading housing for genuine buyers. For multiple homeowners, the LTV cap will be differentiated to 40%, 30%, etc., depending on the number of houses owned.

Experts predict that housing prices will decline this year. Professor Kim Tae-gi of Dankook University's Department of Economics said, "The reason real estate prices rose is related to the government's regulatory policies. Because real estate supply was suppressed, it was thought to be scarce, so prices rose. But now that the government and presidential candidates from both parties are easing real estate regulations, housing prices will fall and normalize."

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