[Inside Chodong] "Real Estate Hurts and Hurts Again"

[Asia Economy Reporter Ryu Jeong-min] The Moon Jae-in administration has less than six months left in its term. Looking back over the past four and a half years, the "sore spot" remains real estate. The Blue House, the government's control tower, must humble itself in the face of the real estate issue. What has happened to "ordinary people's real estate" during the Moon Jae-in administration?

According to the Ministry of Land, Infrastructure and Transport's actual transaction price disclosure system, in October 2021, the 84㎡ jeonse (long-term lease) of the first phase of Unjeong Lotte Castle Park Town apartments in Paju, Gyeonggi Province, was traded at 520 million KRW. Unjeong Lotte Castle is a station-area apartment located about 300 meters in a straight line from Yadang Station on the Gyeongui-Jungang Line. It was built less than five years ago (constructed in 2017) and is characterized as a so-called "first-tier brand."

Although it has elements preferred by demanders, it is still a considerable burden for those commuting to Seoul. The distance from Unjeong Lotte Castle to Gwanghwamun in Seoul by car is 41.5 km, taking about an hour during commuting hours. Using public transportation takes about 1 hour and 30 minutes. The round-trip commuting time amounts to 2 to 3 hours. If the workplace is in Gangnam, Seoul, one must prepare for a 3 to 4-hour round trip.

[Image source=Yonhap News]

The reason people working in Seoul move to new towns is not only a preference for a pleasant living environment but also the significant issue of housing costs. Even if they waste about three hours daily on the road, they choose life outside Seoul expecting relatively affordable housing costs (jeonse or monthly rent).

Is it reasonable for the so-called national standard apartment jeonse price in Unjeong, Paju, to exceed 500 million KRW? In October 2017, the first year of the Moon Jae-in administration, the highest jeonse price for an 84㎡ apartment in Unjeong Lotte Castle was 325 million KRW. At that time, the jeonse price for an 84㎡ apartment in Eonma Apartments, Daechi-dong, Gangnam-gu, Seoul, was around 500 million KRW. The jeonse price of Unjeong Lotte Castle in October this year matches the jeonse market price of Gangnam Eonma Apartments four years ago.

Since the Moon Jae-in administration began, the jeonse price of Unjeong Lotte Castle has risen by about 200 million KRW. Has the income of those renting there increased by the same amount during that period? Unless they have won the first prize in a lottery, this scenario lacks realism. If the jeonse price is at an unaffordable level, the dream of owning a home inevitably wavers.

When the "real estate dark clouds" envelop society, what should the Blue House do? During the Roh Moo-hyun administration, the Blue House tried to publicize the results of economic indicator improvements. But would ordinary people, struggling just to get through today, listen to stories about export achievements or national income increases?

These days, the Blue House reminds one of the Roh Moo-hyun administration. Why is public reaction lukewarm even when it is said that South Korea is treated as a developed country? It is not unrelated to the reality where the shadow of real estate shrinks the leisure of life and hope for the future. Before feeling hurt that the government's achievements are not properly recognized, the Blue House should reflect on the lives of ordinary people, especially the shadow cast by real estate.

In that sense, the post by former Presidential Chief of Staff Lim Jong-seok on Facebook is worth pondering not only by himself but also by current Blue House officials. "Real estate is painful and painful again. Saying it is due to the global environment is an excuse of intellectuals. The responsibility of politics is that heavy. There is nothing to say, even with ten mouths, about the dream of owning a home becoming more distant."