"‘2·4 Measures Must Be Implemented on Schedule’... Can LH Overcome Speculation and Succeed in Stabilizing Housing Prices?"

Hong Nam-gi Apologizes Over LH Pre-Speculation Allegations
Concerns Over Declining Trust in Policies for Housing Price Stability
Second New Housing Site Announcement for Gwangmyeong-Siheung Next Month
Attention on Results of Full-Scale Investigation of 50,000 Public Officials

Deputy Prime Minister for Economy Hong Nam-ki and Minister of Land, Infrastructure and Transport Byeon Chang-heum, along with others, bow their heads during the announcement of the "Message to the People Regarding Real Estate" held at the Government Seoul Office in Jongno-gu, Seoul on the 7th. Photo by Yoon Dong-ju doso7@

[Asia Economy Reporter Moon Jiwon] Despite the allegations of land speculation by employees of Korea Land and Housing Corporation (LH) in the Gwangmyeong-Siheung district, the government has decided to proceed with the follow-up measures of the February 4th housing supply plan without delay. Accordingly, additional housing supply candidate sites are expected to be announced within this month.

However, in the market, public opinion on the government's public development policy has significantly worsened, and there is a possibility that additional speculation cases may be discovered during the ongoing investigation into speculation allegations involving 50,000 public officials and their families, making the execution of follow-up measures challenging.

On the 7th, Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, after concluding the real estate-related ministers' meeting at the Government Seoul Office, stated in the "Message to the Public Regarding Real Estate" that "The housing supply plan, including the February 4th plan to supply 830,000 housing units, will definitely be implemented on schedule."

According to Deputy Prime Minister Hong, first, within this month, the candidate sites selected through consultations between the private sector and local governments for the February 4th plan, as well as the second phase public redevelopment candidate sites announced in last year's August 4th plan, will be disclosed.

Additionally, next month, the government will announce the locations for the second phase of new public housing sites following the Gwangmyeong-Siheung district. Previously, the government announced plans to supply 180,000 housing units in the metropolitan area by 2025 through the creation of new public housing sites. The Gwangmyeong-Siheung district accounts for 70,000 units, representing 40% of the total volume.

Deputy Prime Minister for Economic Affairs Hong Nam-ki is delivering a statement titled 'Message to the Public Regarding Real Estate' at the Government Seoul Office in Jongno-gu, Seoul, on the 7th. Photo by Yoon Dong-ju doso7@

The reason the government reiterated its commitment to proceed with the February 4th plan without disruption is interpreted as a concern that the recent 'LH speculation allegations' might undermine the momentum of the government's previously pursued housing price stabilization policies.

According to the weekly apartment price trends by the Korea Real Estate Board, apartment prices in Seoul rose by 0.07% this week, a decrease in the rate of increase compared to the previous week (0.08%). This is because buying demand has continuously decreased as the supply plan has become more concrete following the February 4th plan.

However, as allegations spread that LH executives and employees engaged in pre-speculation worth billions of won using insider information before the Gwangmyeong-Siheung district was designated as the third new town, the credibility and driving force of government policies have significantly declined.

Deputy Prime Minister Hong also expressed on the same day, "I am saddened and fearful that the government's policy will lose its will and sincerity, which has been devoted to stabilizing the real estate market through all policy efforts," emphasizing that "the real estate market must not be shaken again."

First, the government plans to accelerate housing price stabilization by consecutively conducting the recruitment of tenants for public rental housing in June and the preliminary subscription for the third new town in July, even after the announcement of the second phase of new housing sites next month.

The key issue will be the results of the ongoing comprehensive investigation into speculation allegations involving public officials and whether the truth will be uncovered and punished regarding LH employees involved in speculation.

If similar speculation allegations are discovered during the additional investigation, it is analyzed that the procedures such as announcing new housing sites may be delayed due to the expansion of the investigation and worsening public opinion.