Seoul Mayor Oh Se-hoon sharply criticized President Lee Jae-myung for mentioning the possibility of a plunge in dwelling prices, saying, "The president still does not properly see the reality of the real estate market and people's livelihoods."
On the 31st, Mayor Oh posted on his Facebook a message titled "The president's perception of the real estate reality leaves me speechless," and stated accordingly.
Earlier, on the previous day, President Lee noted on social media that he was preparing for the possibility that dwelling prices could plunge due to "early large-scale supply, suppression of speculative demand, and a surge in loan arrears and auctions amid high interest rates."
In response, Mayor Oh said, "It is absurd to begin by predicting a plunge in dwelling prices, and the grounds cited—'early large-scale supply,' 'suppression of speculative demand,' and 'a surge in loan arrears and auctions'—clearly reveal that the president is not properly seeing the reality of the real estate market and people's livelihoods."
He also criticized the government's dwelling supply plan as lacking effectiveness.
Mayor Oh said, "If the government's supply announcement, which is all noise about targets without even showing concrete timelines and execution plans, is considered 'early large-scale supply,' that is a grave misjudgment," adding, "Plans that are unlikely to even break ground during the president's term can neither stabilize home prices nor give the public confidence in supply."
He argued that the recent decline in asking prices for some listings in the Gangnam area should not be assessed as an effect of suppressing speculative demand by the government.
He said, "If one judges a temporary lowering of asking prices for some ultra-high-priced dwellings ahead of the implementation of punitive taxes and the reduction of the long-term holding special deduction as a decline in prices across the market, that is a big mistake," adding, "Rather, home prices are rising mainly in the outskirts of Seoul, and a 'price leveling' is underway." He continued, "If this is evaluated as a policy achievement, you are either receiving flawed reports or turning away from reality."
Mayor Oh also pushed back against interpreting the increase in loan arrears and auctioned properties as a harbinger of falling dwelling prices. He said it is difficult to judge the trajectory of dwelling prices based solely on an increase in auctioned properties, and that the successful bid rate—which shows how the actual winning bid compares to the appraised value—must be examined together.
Mayor Oh said, "In July this year, the successful bid rate for Seoul apartments was 101.0%, exceeding 100% for the fourth consecutive month," explaining, "This means that in Seoul, despite more properties going to auction, they are being awarded at prices higher than their appraised values." He emphasized, "The auction indicator the president suggested paying attention to is not a sign of falling home prices, but evidence of Seoul's thick pool of waiting demand and a severe supply shortage."
He also raised issues with President Lee's view of rising loan arrears and auctions. Mayor Oh said, "Not every owner of a home put up for auction is a speculator who rashly bought dwellings with excessive loans," adding, "There are self-employed people who could not endure sluggish domestic demand and high interest rates, and ordinary citizens who, after offering their only home as collateral to raise business funds, are now at risk of losing both their livelihood and their place of living."
He continued, "Rather than welcoming a flood of auctioned properties as if it were a signal of a home-price crash, as the top person responsible for state affairs you should feel a heavy sense of responsibility in the face of the pain of citizens who have no choice but to put their homes up for auction."
Mayor Oh also voiced suspicion that the backdrop to President Lee directly mentioning a "home-price crash" might be the absence of government supply measures. He asked, "Since there are no practical supply measures to present right away, is the president directly invoking a 'home-price crash' to instill fear in the market and squeeze dwelling owners to force them to list their properties?"
He added, "Real estate is not a problem that can be solved by threatening the public, nor will the market move as the government wishes just by repeating the slogan 'eradicate speculation,'" emphasizing, "A market where demand and supply, interest rates and finance, and sales and leases are intricately intertwined must be handled with accurate data and a cold-eyed grasp of reality."
Mayor Oh urged, "Stop trying to ride out the crisis with stopgaps and fear," and "Even now, the government must completely reexamine its misguided real estate policy stance and choose a straightforward approach that will actually supply dwellings where the public wants them." He added, "Over the past year, the public and the president have already experienced enough," and "It must change now."