Former Policy Chief Kim Suhyun: "Moon Government Failed to Control Housing Prices... Should Have Tightened Loans"

Former Chief Kim Soo-hyun's New Book 'Real Estate and Politics'
"Not All the Moon Jae-in Government's Responsibility"
"Should Have Suppressed Real Estate Loans More Strongly"

Kim Soo-hyun, the former Blue House policy chief who led the Moon Jae-in administration's real estate policy, partially acknowledged responsibility for the failure of the real estate policy, saying, "The Moon Jae-in government failed to control housing prices." While citing external limitations such as the external economic environment and COVID-19, he reflected on the causes of failure, saying, "We should have suppressed loans more strongly."

Former Blue House Policy Chief Kim Soo-hyun [Photo by Yonhap News]

Kim Soo-hyun served as the Senior Secretary for Social Affairs to the President from May 2017 to November 2018, during which he led the establishment of comprehensive real estate measures such as the August 2nd and September 13th policies. Through his new book, Real Estate and Politics (Maywol-ui Bom), Kim looked back on the Moon Jae-in administration's real estate policy and analyzed the causes of its failure.

He admitted that he "clearly bears some responsibility for the real estate policy during the first two years of the Moon Jae-in government," adding, "The Moon Jae-in government failed to control housing prices. It was not just a failure; there were many apartment complexes where prices more than doubled. Jeonse deposits also surged consecutively. No excuse can justify this."

Kim stated that there were external limitations that prevented the Moon Jae-in government from controlling housing prices. He said, "There were external limitations beyond the government's control, such as global excess liquidity and economic stimulus pressures due to COVID-19," and added, "It is difficult to say that the housing price issue is entirely the responsibility of the Moon Jae-in government."

However, he acknowledged that "failing to properly respond to the 'panic buying' concentrated from 2020 to the first half of 2021 was a painful mistake." He added, "It is true that the price increases after 2020 were essentially a bubble. It is regrettable and very regrettable."

[Photo by Yonhap News]

Kim analyzed the causes of the real estate policy failure into four points.

The first was loans. He said, "We should have suppressed loans more strongly," adding, "Under conditions where it was difficult to raise interest rates overall, the DSR (Debt Service Ratio) should have been applied more strictly and earlier, and especially jeonse loans, credit loans, and modified real estate corporate loans should have been monitored and blocked."

He pointed out as regrets the postponement of the full introduction of DSR from the originally planned 2019 to after 2021 and the exclusion of jeonse loans from DSR calculations.

He also criticized the failure to curb supply anxiety early. He said, "I regret that the 3rd New Town decision and the metropolitan transportation network measures for the 1st and 2nd New Towns were not planned and implemented sooner."

He further cited the loss of trust in real estate regulations due to not adhering to principles and norms, and the wavering of policy leadership as causes of failure.

Meanwhile, the Board of Audit and Inspection announced on the 15th of last month that it requested prosecution to investigate 22 former government officials, including Kim Soo-hyun, for long-term manipulation of official government statistics on housing prices, income, and employment during the Moon Jae-in administration. In response, Kim Soo-hyun drew a clear line in an interview with a media outlet last month, saying, "I have never tried to deceive the public with distorted figures."