Hong Nam-ki: "Housing Prices Have Already Passed the Peak... Will Focus on Supply and Speculation Eradication Policies in the Second Half"

On the 28th, Government Seoul Office Announces 'Message to the Public for Real Estate Market Stabilization'
"Time to Make Decisions Carefully Rather Than Chasing Purchases"
"Household Debt Growth Rate to be Capped at 5-6% This Year... Managing Liquidity Inflows"

[Image source=Yonhap News]

[Sejong=Asia Economy Reporter Kim Hyunjung] The government recently warned that housing prices are at peak levels and emphasized the need for careful decision-making rather than chasing purchases. In particular, it announced plans to focus policy efforts on supply policies in the second half of the year, crackdowns on speculation, and strengthening loan regulations, signaling factors that will exert downward pressure on prices.

Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki announced this message titled 'Message to the Public for Real Estate Market Stabilization' on the morning of the 28th at the Government Seoul Office.

Deputy Prime Minister Hong stated, "Indicators measuring housing price levels and appropriateness are approaching or have already exceeded their highest levels," adding, "The possibility of housing price adjustment is not based on intuition but on past experience and what key related indicators have shown, as well as concerns raised by foreign cases and domestic and international expert institutions." He further emphasized, "Rather than chasing purchases driven by anxiety, it is time to listen carefully to future market conditions, liquidity situations, objective indicators, and the opinions of many experts and make decisions prudently."

Hong Nam-ki continued, "Indicators measuring housing price levels and appropriateness, such as real apartment prices, housing purchase burden index, and price-to-income ratio, are approaching or have already exceeded their highest levels," and added, "International organizations point out the possibility of adjustment in excessively rising housing prices, and according to a survey conducted by the Korea Development Institute (KDI) targeting 100 real estate expert panelists, 94.6% of respondents answered that the current housing price level is overvalued."

He went on to say, "We will prioritize real estate market stabilization as the top policy task and focus on expanding housing supply in the second half of the year," adding, "We will faithfully implement existing housing supply plans and further advance the supply schedule by even a single day." He also emphasized, "We will actively consider various measures to secure additional land sites."

He explained that this year’s move-in volume is maintained at an average level nationwide with 460,000 units and 83,000 units in Seoul, and that from 2023 onward, more than 500,000 units will be supplied annually, indicating that there is no shortage of supply.

Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki (third from left) and others are attending the joint briefing of real estate-related ministries held at the Government Seoul Office in Jongno-gu, Seoul on the 28th. From the left, Kim Chang-ryong, Commissioner of the National Police Agency; Eun Sung-soo, Chairman of the Financial Services Commission; Deputy Prime Minister Hong; and Noh Hyung-wook, Minister of Land, Infrastructure and Transport. Photo by Kim Hyun-min kimhyun81@

He also diagnosed that factors other than supply and demand are increasing the possibility of price declines. Deputy Prime Minister Hong said, "Looking at related sentiment indicators such as the Housing Price Outlook CSI, vague expectations of price increases have formed based on uncertainties separate from market supply and demand," and pointed out, "It is very important to control excessive profit expectations."

He expressed a strong intention to crack down on market disruption activities. Hong Nam-ki announced, "We will conduct year-round crackdowns to prevent the four major real estate market disruption activities from gaining a foothold in the market." The four major market disruption activities are ▲illegal use of insider information ▲price manipulation such as fictitious transactions ▲illegal brokerage such as false contracts ▲illegal resale and fraudulent subscription.

Additionally, he stated that excessive liquidity inflows will be thoroughly managed. He explained, "While managing the household debt growth rate within 5-6% this year, in the second half, real estate loans other than for actual demand will be suppressed as much as possible."