Won Hee-ryong: "Real Estate Market Must Maintain Downward Stability... Premature to Expect Major Uptrend"

The government emphasized a downward stabilization of the real estate market and refrained from artificial intervention. Regarding reverse jeonse, the policy is also not to indiscriminately ease the Debt Service Ratio (DSR).

Won Hee-ryong, Minister of Land, Infrastructure and Transport, is meeting with the press corps at the Government Sejong Complex on the 3rd to answer questions related to current issues. / Photo by Ministry of Land, Infrastructure and Transport

On the 3rd, Won Hee-ryong, Minister of Land, Infrastructure and Transport, met with the press corps at the Government Complex Sejong and stated, "We are cautious about some psychological divergences, such as localized price increases, occurring after the soft landing of the real estate market."

Minister Won said, "Real estate prices have risen too much over the past five years. It is premature and undesirable to move toward a general upward trend now. We do not want transactions or asking prices to excessively shift to a seller's market."

He added, "The downward stabilization refers to the overall market. There may be localized upward transactions, but it is necessary to be cautious about using policies aimed at the entire market to solve partial issues."

The reverse jeonse issue was emphasized as requiring social consensus. Reverse jeonse inevitably occurs when the market price falls, but the government cannot set a precedent of rescuing by loosening loans each time.

Minister Won explained, "The rise and fall of market prices is a natural phenomenon. The government is discussing ways to better reflect landlords' repayment ability and their responsibility and burden in the jeonse system, and to have financial institutions implement safeguards rather than unconditional lending."

Accordingly, the easing of DSR will be approached in a way that does not involve rapid changes. If DSR is seen as a financial benefit, it is considered inconsistent with fair and equal opportunities.

Regarding the overseas construction market, which now includes Saudi Arabia and Iraq, he expressed expectations for substantial cooperation project results in the second half of the year. Minister Won said, "The scale of overseas construction orders in the first half exceeded $17.3 billion. We are strengthening cooperation with related ministries such as the Ministry of Trade, Industry and Energy and the Ministry of Science and ICT." The Yoon Seok-yeol administration has set a target of $50 billion in overseas construction orders during its term.

In line with this, incentives are also being considered to address the shortage of overseas workers. This includes raising the current income deduction limit of 3 million won and expanding special housing supply for workers who perform long-term duties in remote areas.

Additionally, Minister Won stated, "Together with the recently appointed first and second vice ministers, we will appropriately share duties and ensure good national performance. We will also work with financial authorities in the same direction and with the same perspective to implement policies."