At a forum hosted by the Korea Housing Association, a series of arguments were raised that it would be difficult to rein in home prices with the Lee Jae-myung administration's real estate regulatory policy. Experts noted that demand-suppression measures have continued for more than 60 years without effect, and that if multiple-home owners are excessively constrained, instability could eventually spill over into the rental market.
Son Jae-young, an emeritus professor at Konkuk University, said at a roundtable forum on the theme of "A retrospective and future direction of Korea's housing policy," held at the main conference room of the Korea Appraisal Board Association Hall in Seocho-gu, Seoul, on the afternoon of the 19th, "The policy stance that defines the cause of rising real estate prices as speculation and seeks to suppress demand through tax and financial regulations has continued from the 1960s to today, but it has all failed," adding, "If there are no results even over this length of time, we have to see a fundamental problem in the policy direction."
Son said, "There is a lack of understanding of the mechanism for real estate price determination," explaining, "There is a premise that taxes or financial regulations can lower home prices, but in reality there have been many periods when interest rates and the rate of increase in the price of dwellings moved together."
Son also emphasized that even the concept of "speculation" is ambiguous. He said it is not appropriate to define as speculation the act of saving a jeonse deposit and using loans to purchase dwellings. He added that if the role of multiple-home owners as suppliers of rental dwellings is ignored and they are regulated, the damage will ultimately fall on tenants.
There was also a point made that stabilizing home prices themselves should not be the goal. Lee Sang-young, a professor at Myongji University, said, "Recently, there has been a tendency to perceive the decline in home prices itself as a policy goal." Cho Min, a professor at Sogang University, also said, "Even if the policy intent is good, government intervention in the housing market is to manage system risk caused by the real estate market, and it should not set stabilizing home prices themselves as the goal."
There was also a suggestion to strengthen financial support for end users. Lee Sang-young, a professor at Myongji University, said, "For people buying dwellings for the first time in their lives, we need to establish a system that provides loans at very low interest rates large enough to buy a real home," predicting that if the government's housing policy goals are aligned with "acquiring one's own home" and "rental stability for low-income groups," it will naturally lead to price stability.
Jin Mi-yun, a professor at Myongji University, said, "As long as the belief in Gangnam's invincibility and real estate's invincibility does not change, I am very skeptical that home prices will fall even if a lot of homes are supplied," emphasizing, "It is more important not just to supply homes, but to supply homes that people can actually afford to buy." She continued, "People say there is a supply cliff, but there are not many places where mass supply is feasible," arguing that higher-quality non-housing options, such as officetels and short-term accommodations, need to be developed.
The event was prepared to look back on the trajectory of Korea's housing policy over the past 35 years and to examine academically the direction and tasks of housing policy going forward. Before the forum, Bang Song-hee, a senior research fellow at the Korea Housing Finance Research Institute, presented on the 35-year history of Korea's housing policy and the future direction of housing policy.
The subsequent roundtable discussion was chaired by former KDI professor Kim Jeong-ho (the first president of the Korea Housing Association), with participants including emeritus professor Son Jae-young of Konkuk University, professor Lee Sang-young of Myongji University, professor Jeong Ui-cheol of Konkuk University, professor Jo Man of Sogang University, professor Jin Mi-yun of Myongji University, and former SH Urban Research Institute director Cheon Hyeon-suk.
Jin Chang-ha, president of the Korea Housing Association, said, "Through this seminar, we expect to both objectively organize the evolution of Korea's housing policy and seek the direction that future housing policy should pursue amid new policy environments such as changes in the structure of the housing market, demographic shifts, and expanded demand for residential welfare."
Starting with this seminar, the Korea Housing Association plans to continue a series of projects marking the 35th anniversary of its founding and to consistently create a public forum for historical reflection on housing policy and for presenting a future vision.