[Reporter’s Notebook] The Ministry of Land’s Self-Congratulatory Housing Policy

Yoo In-ho, Deputy Head of Securities Department

[Asia Economy Reporter Yoo In-ho] "So far, I believe that (real estate) policies are all working comprehensively." (Kim Hyun-mi, Minister of Land, Infrastructure and Transport)

"I think there are some situations where the government's many efforts are not functioning properly, so overall, extraordinary efforts are needed." (Jung Sye-kyun, Prime Minister)

These remarks were made at the full meeting of the National Assembly Budget and Accounts Committee on the 30th of last month. They are a fragmentary example showing stark differences in views on real estate policy within the Moon Jae-in administration. While the head of the main ministry, the Ministry of Land, Infrastructure and Transport, perceives the policy as "working well," the Prime Minister's words that "extraordinary efforts are needed" suggest a certain temperature gap.

The reason why the real estate policy remarks by Prime Minister Jung and Minister Kim became an issue is that despite the June 17 real estate measures, prices of sales and jeonse (long-term lease) in Seoul and the metropolitan area have rather risen, causing dissatisfaction not only in the market but also among actual homebuyers.

Day after day, various expressions indicating policy failure such as "balloon," "straw," "reverse balloon," "patchwork," and "belated response" have been pouring out as harsh criticism.

What is different from before is that the critical voices, which were previously raised by the market and opposition parties, have recently been coming out daily not only from the ruling party but also from progressive parties. Some ruling party lawmakers, progressive civic groups, and even ruling party local government heads have joined in. This is a markedly different pattern from before.

The market and experts have long since judged the government's real estate policy as a defeat. The twenty-one real estate measures so far have failed to curb housing prices and instead have exacerbated market confusion by causing soaring housing and jeonse prices.

Nevertheless, the Ministry of Land, Infrastructure and Transport, the main ministry, still seems to be focused solely on one-way policy promotion. In fact, Minister Kim appeared on broadcasts on the 26th and 29th of last month to promote government measures.

First Vice Minister Park Seon-ho also appeared on TV, mentioning the possibility of additional measures and emphasizing the necessity of the policies. One expert pointed out, "Voices calling for supplementary measures to protect bona fide homebuyers are rising everywhere, but the government seems to be self-congratulatory, saying 'we are doing well' alone." There are even reports that due to this atmosphere, the ministry’s staff are more concerned with watching the 'higher-ups' than preparing supplementary measures.

"Even if the Moon Jae-in government has given up on education, I hope it at least makes some progress on real estate. The people are not experimental subjects, and no matter how many measures are introduced, if they do not work, it is only natural to listen to various opinions and bring about policy changes."

This was written by Cho Ki-sook, former Blue House spokesperson under the Roh Moo-hyun administration and professor at Ewha Womans University Graduate School of International Studies, on Facebook the day before. Before promoting policies or discussing other measures, perhaps it is time for the government to open its ears and carefully reflect on these words at least once.