Won Hee-ryong: "Regulatory Easing Will Be Careful, Housing Supply Will Be Transparent" (Comprehensive)

Emphasizing Caution... Response to Concerns Over the Shaky Real Estate Market

[Asia Economy reporters Kangwook Cho, Haeyoung Kwon, Dongpyo Kim, Sejong] The first economic team of the Yoon Seok-yeol administration has summarized its real estate policy direction as ‘market normalization.’ It starts from the awareness that forced demand suppression caused market distortions. However, as signs of rising housing prices reemerge due to expectations of deregulation after the presidential election, messages aimed at calming these expectations are also being emphasized. The market normalization that the Yoon Seok-yeol administration aims for is not only a state where transactions are smooth and free but also includes ‘stabilization’ without abrupt price fluctuations, signaling this to the market. In summary, the real estate policy of the two top figures, Choo Kyung-ho and Won Hee-ryong, amounts to ‘deregulation’ that meets the public’s expectations and ‘housing price stabilization’ through speed control.

On the 11th, Won Hee-ryong, the nominee for Minister of Land, Infrastructure and Transport, declared upon his first day at the Gwacheon Government Complex in Gyeonggi Province, “I will not take an arrogant and unrealistic approach that claims housing prices can be controlled at once or that the market can be suppressed with just a few government policy measures.” While directly criticizing the anti-market regulatory policies poured out by the current government under the pretext of curbing speculation, he also made it clear that deregulation to improve these policies does not mean creating ‘favorable conditions for speculation.’

Won said, “I will be cautious not only about excessive deregulation or parts that could be misused as wrong signals in the market but also move delicately and carefully in a direction that can be managed and controlled.” He reiterated, “There is no deregulation or supply that could lead to wrong price signals in the future vision of the Yoon Seok-yeol administration. We will present realistic supply measures that are predictable and tailored to the precise composition of actual demand.”

This aligns with the ‘market economy’ emphasized by Choo Kyung-ho, the nominee for Deputy Prime Minister and Minister of Economy and Finance. At a press briefing the day before, Choo said, “If the real estate market normalization policy proceeds too rapidly, it could cause other side effects,” adding, “We will proceed step by step, paying attention to such aspects.” Both nominees clearly indicated that they will implement ‘speed control’ considering the risk of side effects during rapid market normalization.

Won’s emphasis on a ‘cautious approach to avoid stimulating housing prices’ is interpreted as a response to concerns that the real estate market has started to stir due to expectations of deregulation under the new government. While addressing some excessive regulations that caused market distortions under the current government, he intends to approach this ‘realistically’ so as not to stimulate housing prices.

On the morning of the same day, as he arrived at the hearing preparation office set up at the Gwacheon Government Complex, he told reporters, “I will not take an arrogant and unrealistic approach that claims housing prices can be controlled at once or that the market can be suppressed with just a few policies.” Regarding supply, he also expressed plans to provide housing that matches the residential demand of actual users in a predictable manner, rather than a vague ‘supply bomb.’

However, since he must intervene in policies prepared by the current government in some form, the greatest ability required of Won is expected to be ‘political skill.’ The fact that he, who has never been mentioned as a candidate for Minister of Land, Infrastructure and Transport before, is now leading the ‘real estate policy’ that holds the fate of the new government can be interpreted in this context. Won is evaluated as having experience in student activism during his university days and being able to communicate well with the 586 generation within the Democratic Party. Regarding his appointment, Won self-assessed, “I believe I was brought in as an expert in communication with the public and political coordination.”

In this regard, the fact that the ministerial nominee unusually agreed to a 15-minute interview on his first day at work seems to reflect his sense of the need to send a ‘clear message to the market.’ He warned, “It is a big misconception to think that local high-priced housing will surge due to deregulation bombs such as reconstruction and redevelopment, and that one can enjoy development and speculative profits.” He added, “Regarding parts that could be misused as wrong signals, I will be very cautious and finely adjust (deregulation) in a direction that can be managed and controlled.”

On the supply side, he said, “The government’s philosophy is that supply should match the demand according to the economic capacity that actual users can bear.” He emphasized, “We will focus not only on the total quantity as a number but also on the customized composition of demand and proceed with predictable supply.”

Regarding the Three Lease Laws, he placed emphasis on revision rather than abolition. He said of the laws, “They were established with good intentions to protect the housing rights of tenants who are vulnerable in housing,” adding, “Protecting tenants and housing stability for the vulnerable is the reason the state exists.” He also said, “There are parts that fall short of the intentions and expectations and some side effects, but the majority of tenants and lessees whom the state wants to protect are absolute.”

Won is a representative figure who has been critical of the current government’s real estate policies. President-elect Yoon Seok-yeol has frequently highlighted the problems of the Three Lease Laws among the current government’s policies. In this situation, giving meaning to the positive intent of these laws can be seen as an expression of the will to stabilize the real estate market through the message that ‘there will be no drastic changes.’