Won Hee-ryong: "House Prices Decline Should Be Accepted as Reality Like the Weather"

"Rising to 1 Billion Won but No Financial Shock Despite 200-300 Million Won Drop"
"Excess Reconstruction Profits Should Naturally Be Recovered... But Giving Up Projects Is Excessive"
"Appropriate Level of Recovery Without Blocking Supply... Opposition Will Agree"
"Supplying Good Housing in Good Locations Is the Reason for Yoon Seok-yeol Government's Rule"

Minister of Land, Infrastructure and Transport Won Hee-ryong is announcing the Yoon Seok-yeol administration's first housing supply plan on the 16th at the Government Seoul Office in Jongno-gu, Seoul. Photo by Kim Hyun-min kimhyun81@

Won Hee-ryong, Minister of Land, Infrastructure and Transport, said on the 16th, "Just as we cannot artificially change the weather, we must accept the reality that real estate transactions are shrinking and prices are generally declining." However, he added, "In this process, we must prevent excessive shocks caused by rapid drops and allow economic agents to adapt."

Minister Won appeared on TV Chosun News 9 that day and responded to the question, "Is the supply of 2.7 million housing units too much in a situation where the real estate market is shrinking and prices are declining?" by saying, "Financial tightening and interest rate hikes are global phenomena."

Regarding the occurrence of transactions with price drops in the billions of won in some areas of the metropolitan area, Minister Won expressed that there is no need for major concern. He emphasized, "For house prices to be described as a 'hard landing,' the situation would have to be severe enough to cause financial shocks. However, currently, regulations such as speculative overheated zones and adjustment target areas are in effect, and the loan-to-value ratio (LTV) is around 40-50%. In such cases, even if the housing price rises to 1 billion won and then falls by 200 to 300 million won, it does not lead to financial shocks."

Minister Won, who announced the plan to supply 2.7 million housing units that morning, appeared on broadcasts consecutively in the afternoon to provide additional explanations and promote the policy.

Regarding the difference between the current supply plan and past government policies, Minister Won emphasized, "The previous government failed because it implemented suppression-oriented policies regardless of the will of the demand-side citizens. We will supply housing in locations and qualities desired by the demand side as quickly as possible."

Minister of Land, Infrastructure and Transport Won Hee-ryong is speaking at the Real Estate Related Ministers' Meeting held at the Government Seoul Office in Jongno-gu, Seoul on the 16th. Photo by Hyunmin Kim kimhyun81@

He actively refuted concerns that the 'Reconstruction Excess Profit Recovery System Reform,' introduced to expand urban housing supply, would allow homeowners to take excessive profits.

Minister Won said, "Excess profits should naturally be recovered," and questioned, "Who among the public would agree to a few people taking all the development profits?" He continued, "However, regardless of the rising house prices, the reconstruction excess profit recovery system has remained punitive for 16 years. Because of this, in some regions and provincial cities, redevelopment and reconstruction are abandoned due to the burden of recovery charges, even though the price increase was natural."

He stated, "We judge that abandoning reconstruction due to the burden is excessive, and we will implement recovery at an appropriate level." Since reforming the reconstruction excess profit recovery system requires legislative amendment, the consent of the Democratic Party, which holds the majority in the National Assembly, is necessary. Regarding this, Minister Won said, "If the recovery is at an appropriate level, I believe the opposition party can agree."

Regarding the revision of the Three Lease Laws (Jeonse and monthly rent cap system, lease reporting system, and contract renewal request right), he explained, "The intention is to create laws that work better." Minister Won also appeared on MBC News Desk that day and said, "It is not about removing protections for tenants." He emphasized, "The Three Lease Laws were passed without proper public hearings under the previous government, simply because of the ruling party's majority. Hasty legislation always causes problems."

Minister of Land, Infrastructure and Transport Won Hee-ryong is announcing the Yoon Seok-yeol administration's first housing supply plan on the 16th at the Government Seoul Office in Jongno-gu, Seoul. Photo by Kim Hyun-min kimhyun81@

In the wake of heavy rains concentrated in the central region causing severe damage to underground and semi-basement houses, related measures were also announced.

Minister Won said, "It is commendable that Seoul City aims to eliminate about 200,000 semi-basement houses as soon as possible," and added, "The Ministry of Land will prepare comprehensive measures covering all abnormal housing, including semi-basement houses, gosiwons (small rooms), rooftop rooms, and vinyl houses." He explained, "Abnormal housing is not limited to semi-basement houses, nor can benefits be given only to semi-basement houses. We will conduct a field survey and resident intention survey for about 3 to 4 months and then prepare comprehensive measures."

Minister Won emphasized, "The goal of this plan is to steadily supply good-quality housing in good locations to dramatically expand the opportunity for all citizens to own their homes, which is also the reason the Yoon Seok-yeol administration came to power. We will definitely accomplish this."