[2022 National Audit] Won Hee-ryong "House Prices Are Too High... Must Maintain Downward Stability for a Significant Period"

Ministry of Land, Infrastructure and Transport National Audit
"Government Only Manages Side Effects of Hard Landing"
"Moon Administration's Public Price Realization Is an Unrealistic Talk" Surgery Foreseen

Won Hee-ryong, Minister of Land, Infrastructure and Transport, is responding to a lawmaker's question during the audit of the Ministry of Land, Infrastructure and Transport held by the Land, Infrastructure and Transport Committee at the National Assembly in Yeouido, Seoul, on the 6th.

Won Hee-ryong, Minister of Land, Infrastructure and Transport, said on the 6th regarding the recent real estate market situation, "Prices are too high, and a period of downward stabilization needs to be maintained," adding, "The government should only manage side effects caused by a hard landing."

Minister Won made these remarks in response to a criticism from Hong Ki-won, a member of the Democratic Party of Korea, during the National Assembly Land, Infrastructure and Transport Committee's audit of the Ministry of Land, Infrastructure and Transport, who said, "Minister Won's judgment on the real estate market is confusing."

Rep. Hong pointed out, "(The Yoon Seok-yeol administration's) tax relief for multi-homeowners and deregulation of safety inspections are policies that stimulate the real estate market when it is stagnant," and criticized, "The government says housing prices need to fall but is instead implementing policies that boost the market."

In response, Minister Won said, "This is not a stimulus policy but a process of normalizing excessive regulations introduced during a period of rapid price increases," adding, "It should be seen as an adjustment process to align with the standard track."

He continued, "The deregulation of reconstruction is aimed at normalizing supply, which is one of the complex factors affecting housing prices, and tax relief is about normalizing taxes for single-homeowners," he emphasized.

Minister Won also hinted at revising the real estate official price realization roadmap pursued by the Moon Jae-in administration.

In response to a remark by Yoo Kyung-joon of the People Power Party, who said, "There is a need to revise the plan for realizing real estate official prices," Minister Won said, "From a common-sense perspective, market prices always fluctuate, so aiming to set official prices at 90-100% of the fluctuating market prices is an unreasonable idea."

He added, "Even if a margin of error is allowed, there would still be many problems; the realization rate under the Moon administration was an idealistic and overly government-centric policy."

The Moon Jae-in administration announced a plan in November 2020 to realize official prices, aiming to raise the official prices, which serve as the basis for property tax and comprehensive real estate tax, to about 90% of market prices by 2030.

However, due to the rapid surge in real estate prices, official prices also skyrocketed, leading to complaints that tax burdens on not only multi-homeowners but also single-homeowners became excessively heavy.

Minister Won said, "We have simulated how the complex realization rate scoring table changes according to the criteria," adding, "Each option has pros and cons, requiring policy judgment, and ultimately, it must be resolved legislatively."