Government to Maintain Regulations, Establish Oversight Body Amid Market Stabilization Efforts
Amid worsening public sentiment over the October 15 real estate measures, President Lee Jae-myung reaffirmed the government’s hardline stance on curbing real estate demand during a Cabinet meeting on the 21st. This appears aimed at dispelling any prospect that the government might revise its policies in response to the real estate market.
The recent bullish trend in the stock market, driven by rising KOSPI levels, is reportedly reducing pressure from backlash against real estate policies. A presidential office official stated, “This is a reiteration of the government’s goal to transition toward productive finance.”
Some government sources have reportedly suggested maintaining current regulations, including designating all of Seoul and parts of Gyeonggi Province as land transaction permit zones for at least two years and further restricting housing mortgage loans based on property values. While concerns persist within the Democratic Party of Korea that these measures could burden next year’s local elections, a presidential office official remarked, “If housing prices stabilize before the elections, negative public sentiment is expected to subside.” A ruling party source added, “The presidential office believes housing prices must be controlled even if approval ratings decline.”
Government agencies are aligning with the presidential office’s stance. The government is discussing plans to establish a new oversight body for the real estate market, strengthen transaction investigations, and impose stricter penalties for market price manipulation.
The ruling party is also following suit. Although concerns are spreading among Democratic Party lawmakers in the capital region, the party leadership has instructed members to refrain from public comments on real estate issues. Since the government’s policy announcement, party leader Jung Chung-rae has remained silent on the matter. A party official explained, “Economic issues like real estate have been left to the presidential office and government,” adding, “Showing a temperature gap between the party and government amid public anger could send a worse signal to the market.”
Han Jeong-ae, chair of the Democratic Party’s Housing Market Stabilization Task Force, held a briefing at the National Assembly, stating, “The Democratic Party fully supports the government’s policies” and pledged, “We will swiftly legislate follow-up measures during the regular National Assembly session and do our best to supply housing that meets demand.”
Both the presidential office and the Democratic Party are cautious about discussing property tax reforms, including increases in holding taxes. A ruling party source noted, “The mere debate over whether to raise holding taxes signals that the market can no longer guarantee profits from owning high-priced homes,” adding, “This is a decision to be made while monitoring market conditions.”
