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, the rental market could ultimately become unstable.
Son Jae-young, an emeritus professor at Konkuk University, said at a roundtable forum on the afternoon of the 19th in the main conference room of the Korea Association of Property Appraisers building in Seocho-gu, Seoul, under the theme "A look back at Korea's housing policy and future directions," "The policy stance that defines speculation as the cause of rising real estate prices and seeks to curb demand through tax and financial regulations has continued from the 1960s to today, but all have failed," adding, "If there are no results even over this length of time, there must be a fundamental problem with the policy direction."
Son said, "There is a lack of understanding about the mechanism of real estate price formation," explaining, "There is an assumption that tax or financial regulations can lower home prices, but in reality there have been many periods when interest rates and the rate of increase in housing prices moved together."
Son stressed that even the concept of "speculation" is vague. 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 multiple-home owners are regulated while ignoring their role as suppliers of rental dwellings, the damage will ultimately fall on tenants.
There was also a point raised that stabilizing home prices themselves should not be the goal. Lee Sang-young, a professor at Myongji University, said, "Recently, there is an aspect in which a decline in home prices itself is perceived 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 arising from the real estate market, and it should not make stabilizing home prices itself the goal."
There was also a recommendation to strengthen financial support for end users. Lee Sang-young, a professor at Myongji University, said, "For people purchasing dwellings for the first time in their lives, the system should be solidified to provide loans at very low interest rates sufficient to actually purchase a home," and predicted that "if the government's housing policy goals are aligned with 'buying 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 many homes are supplied," emphasizing, "It is more important to supply homes that people can actually afford to buy, rather than just supplying homes." She added, "People talk about a supply cliff, but there are not many places suitable for mass supply," arguing that higher-quality non-residential options such as officetels and short-term lodging need to be developed.
The event was prepared to review the trajectory of Korea's housing policy over the past 35 years and to examine academically the future direction and tasks of housing policy. Before the forum, Bang Song-hee, a senior research fellow at the Korea Housing Finance Research Institute, gave a presentation on the history of Korea's housing policy over the past 35 years 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 president Cheon Hyun-suk.
Jin Chang-ha, president of the Korea Housing Association, said, "Through this seminar, we expect to objectively organize the evolution of Korea's housing policy and, amid a new policy environment that includes changes in the structure of the housing market, demographic shifts, and growing demand for residential welfare, create an opportunity to explore the direction that future housing policy should pursue."
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 provide a forum for public discussion for historical reflection on housing policy and for presenting a future vision.