Kim Hyun-mi, Who Failed to Control 'House Prices' and Read 'Public Sentiment'... Ultimately Resigns Amid Controversy

Cheongwadae Appoints Byeon Chang-heum as Successor to Minister of Land, Infrastructure and Transport
'Longest-Serving Minister' Kim Hyun-mi... Dishonorable Resignation
Multiple Measures Announced but Sale and Jeonse Prices Soar
Controversial Remarks Including "If Apartments Were Bread"
However, Highly Trusted Within the Ministry of Land, Infrastructure and Transport

Minister of Land, Infrastructure and Transport Kim Hyun-mi is attending the 'Real Estate Inspection Ministers' Meeting' held at the Government Seoul Office in Jongno-gu, Seoul on the 2nd. Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Moon Jiwon] Kim Hyun-mi, Minister of Land, Infrastructure and Transport, is finally being replaced. She took office as the Minister of Land, Infrastructure and Transport in June 2017 and worked for about three and a half years to stabilize the real estate market, but the market evaluated that she failed to prevent the sharp rise in sale and jeonse prices. Recently, Kim led housing stability policies such as the November 19th Jeonse measures, but due to repeated failures and worsening public opinion, it is analyzed that even the Blue House had no choice but to opt for her replacement.

On the 4th, the Blue House carried out a personnel reshuffle replacing Minister Kim Hyun-mi with Byun Chang-heum, President of Korea Land and Housing Corporation (LH). Kim took office on June 23, 2017, shortly after the Moon Jae-in administration began. In September, she broke the record as the longest-serving Minister of Land, Infrastructure and Transport. Although there were many predictions that she could be replaced due to her long tenure, some argue that this personnel change is effectively a dismissal.

At the time of her inauguration, Minister Kim emphasized the need for "policies that eliminate worries about housing and jeonse/rent." Since then, she introduced several strong real estate measures, but the market's response was generally cold. Even from the end of last year, despite the release of strong regulations such as the December 16th and July 10th measures, sale prices in Seoul and the metropolitan area continued to rise. Especially after the new lease law was implemented at the end of July, the jeonse shortage spread nationwide.

According to statistics from the Korea Real Estate Board, from June 2017 when Kim took office until last month, apartment sale prices in Seoul increased cumulatively by 15.17%. The overall housing price increase rate was 12.49%. President Moon Jae-in mentioned at the New Year's press conference on January 14 that "prices that have risen to the point where ordinary people feel alienated must be restored," but housing prices in Seoul and the metropolitan area continue to rise.

Minister Kim has also been involved in several controversies due to remarks that failed to read public sentiment. On August 25, at the National Assembly Land, Infrastructure and Transport Committee plenary session, she said, "Many houses owned by multi-homeowners have been traded, and it seems that people in their 30s are taking on loans to buy those properties," adding, "It is regrettable that 30-somethings are buying properties released by corporations at high prices."

Her remarks appeared to express concern for 30-somethings buying homes in a 'panic buying' situation, but the context implied that the influx of properties being absorbed by people in their 30s limited the price decline, drawing criticism from the market. Critics pointed out that the government failed to recognize that repeated measures to raise housing prices forced even people in their 30s to take on heavy loans ('yeongkkeul').

On the 10th of last month, at the National Assembly Budget and Accounts Committee plenary session, Minister Kim faced public backlash over comments about the price of her own home. When criticized that "the average price of apartments in Seoul is about 1 billion KRW, but the limit for Didimdol loans is too low at 500 million KRW," she responded, "I can buy a house like mine with a Didimdol loan."

In response, the H Residents' Association, a community group from the relevant complex, issued a statement saying, "Residents are shocked and angry as it could be misunderstood as the cheapest apartment in the metropolitan area," and questioned, "If it's that cheap, why is Ilsan designated as a regulated area?" The apartment Kim mentioned later set a new record price, reportedly rising by tens of millions of KRW.

Recently, Kim also sparked controversy by saying, "If apartments were bread, I would make them overnight." The intention was to express that it is not easy to supply apartments as quickly as bread to meet demand, but many in the market criticized the remark as inappropriate. Former lawmaker Yoo Seung-min criticized on Facebook, saying, "People in this government have it ingrained in their minds that apartments are made by the public, i.e., the government," adding, "That's why such Marie 'Baguette' Antoinette-like remarks come out."

It is known that Minister Kim had previously conveyed her intention to be replaced to the Blue House. There were predictions she would step down during last year's cabinet reshuffle, but she continued in her role after Choi Jeong-ho, the former 2nd Vice Minister of Land, Infrastructure and Transport and minister nominee, was dropped. Despite the market's evaluation, she is said to have strong trust within the Ministry of Land, Infrastructure and Transport. Due to her long tenure, she is well-versed in her duties and, as a politician, is also evaluated as bold and decisive in carrying out her work.