[Analysis] Seoul Apartment Prices Soar 45% + LH Scandal = Real Estate Anger Erupts

Park Young-sun Also Trailed in Her 'Political Hometown' Guro
Overwhelming Support for Oh Se-hoon in Gangnam 3 Districts

[Asia Economy Reporter Park Cheol-eung] In the Seoul Guro district, where former Minister of SMEs and Startups Park Young-sun won three consecutive terms, her vote share was only 43.7%. Even in the place where she held a campaign kickoff event calling it her ‘political hometown,’ she was not chosen. Instead, O Se-hoon, the winning candidate, secured 53.2% there. This is one of the symbolic scenes showing the Democratic Party’s defeat. Conservative-leaning voters rallied, while supporters in traditionally Democratic strongholds defected.

This Seoul mayoral by-election was held amid a sense of deprivation and anger over soaring housing prices, further fueled by the Korea Land and Housing Corporation (LH) speculation scandal. From the perspective of voters who own homes, dissatisfaction with the increased property tax burden seems to have played a role.

Initially, many forecasts expected the voter turnout to slightly exceed 50%, but it unexpectedly reached 58.2%. Both ruling and opposition parties actively encouraged voting, but rather than the Democratic Party’s expected consolidation of its base, it was an outburst of anger votes calling for a judgment on the government, emphasized by the People Power Party.

According to KB Kookmin Bank real estate statistics, apartment sale prices in Seoul surged by 45% last month compared to just before the Moon Jae-in administration began. Not only Gangnam (45.2%) but also Gangbuk (44.8%) showed similar rates of increase. This is also interpreted as the background for the Democratic Party’s defeat in all 25 autonomous districts.

The Gangnam 3 districts (Seocho, Gangnam, Songpa), which account for about 16% of the total with 1.37 million voters, showed relatively high turnout and rallied, playing a driving role in the People Power Party’s large-margin victory. In particular, in Seocho and Gangnam districts, O Se-hoon’s vote shares reached 71.0% and 73.5%, respectively. Turnout was also relatively high. With strong conservative tendencies and increased property tax burdens due to the government’s official price realignment policy, interest in voting seems to have grown. O Se-hoon has continuously emphasized easing the burden of real estate holding taxes.

Looking at the generations, the Democratic Party found itself isolated. According to exit polls by the three major broadcasters (KBS, MBC, SBS), while Park Young-sun received votes in the 30% range among those in their 20s and 30s, O Se-hoon recorded mid-50% support. This was weaker support for the Democratic Party than among those in their 50s. Except for the 40s age group, which showed similar support for both parties, all other age groups favored the People Power Party.

In the Busan mayoral election, Park Hyung-joon maintained a consistent lead in various opinion polls, which was reflected in the actual voting results. Various allegations such as LCT, past National Intelligence Service surveillance involvement, and children’s admission fraud did not have a significant impact, and the region’s strong conservative characteristics became more pronounced.

Kim Jong-min, senior supreme council member of the Democratic Party, said on MBC Radio that day, "The public probably did not ignore those (various allegations) or see them as nothing, but rather saw bigger problems beyond that."

Professor Lee Jun-han of Incheon National University’s Department of Political Science and Diplomacy said, "It is the second half of the administration, and the judgment on the government, which was delayed due to COVID-19 in last year’s general election, was expressed this time. Nevertheless, voter tendencies are showing very dynamic changes, and since the issue of fairness will continue to play a role, moral standards will remain important."