Won Hee-ryong "Difficult to Predict Housing Prices Bottom Short-Term...Careful Demand-Side Policy Needed"

"Not All Unsold Units Can Be Considered Malignant"
Structural Improvement Needed in Construction Site Culture and Practices

On the 28th, Won Hee-ryong, Minister of Land, Infrastructure and Transport, stated, "(Regarding house prices) it is too early to say whether they have hit the bottom or if the transaction recovery is underway. It is a situation where short-term predictions cannot be made with confidence."

Minister Won made these remarks during a visit to the Ministry of Land, Infrastructure and Transport press room at the Government Sejong Complex in the afternoon, adding, "We are also closely monitoring policies for demand-side participants."

Won Hee-ryong, Minister of Land, Infrastructure and Transport, is visiting the Ministry of Land, Infrastructure and Transport press room at the Government Sejong Complex on the afternoon of the 28th, engaging in a Q&A session with reporters. / Photo by Ministry of Land, Infrastructure and Transport

Recently, the real estate market has shown conflicting signs, with the rate of house price declines slowing since the 1·3 measures, while unsold units have reached the highest level in over a decade. According to the Korea Real Estate Board, nationwide apartment prices have continued to decline for nearly 40 weeks, but the rate of decline has gradually narrowed this year. On the other hand, as of January, the number of unsold apartments nationwide was 75,359 units, the highest in 10 years and 2 months. This explains the divided views on the real estate market.

Regarding this, Minister Won explained, "The government formulates policies by assessing the entire market. From the public's perspective, market participants make judgments by putting their own money at stake, so their assessments are considered much more accurate." He added, "The core of the market is the price function, and the government's goal is to ensure that this function operates well, not to focus on the outcome figures."

He continued, "We responded swiftly to the real estate project financing (PF) insolvency issue triggered by Legoland, injecting 5 trillion won and significantly cushioning the shock of funding shortages through financial sector restructuring." He also said, "Some local construction companies that cannot access government guarantees and have loan delinquencies are being shunned by consumers according to market logic, even if it is not a recession period."

He emphasized that unlike during past financial crises when failure to distinguish between good and bad assets put everyone at risk, many cases now are self-inflicted.

Minister Won stated, "If private supply contracts, we will accelerate increasing public supply. Reducing volatility to some extent is the Ministry of Land, Infrastructure and Transport's role in the supply sector." He also noted that construction companies should make their own judgments based on customer and market movements.

He added, "Not all unsold units can be considered malignant; the enthusiasm of prospective buyers has decreased, and the sale prices are causing friction with surrounding market prices." He stressed, "Supporting this with taxes is anti-market and against conscience."

Regarding the elimination of corruption at construction sites, he pledged to continuously and structurally change the culture, climate, and system throughout President Yoon Seok-yeol's term. In particular, Minister Won said, "It is not only the labor unions that are problematic in this process. There are also phenomena such as collusion between perpetrators and victims, where business operators and forces disguised as unions exploit each other's weaknesses." He added, "This will be carried out within the broader framework of normalizing the overall industrial structure."

Regarding allegations of manipulation of house price statistics by the previous administration, currently under investigation by the Board of Audit and Inspection, he firmly stated, "Any government can make mistakes or failures, but manipulation is a matter of honesty and trust toward the public, so it cannot happen."

He continued, "We will strictly follow up according to principles based on the audit results," adding, "We are watching closely with a sense of vigilance."