[Initial Insight] Government's Housing 'Supply' Measures Like a Ciphertext

The word 'Supply,' used with different meanings like 'Contract on Paper' and 'Securing Ownership,'
vaguely wraps up real estate policies

It should be used clearly for the public, like 'Bunyang,' 'Chakgong,' and 'Ipju'

After Seoul apartment prices soared this summer, the word the government used most was ‘supply’. This is evident even from the 8·8 measures announced last month. Counting the word ‘supply’ in the government’s ‘Plan to Expand Housing Supply for Residential Stability’ and the ‘427,000 Housing Units Supply in Seoul and the Metropolitan Area’ documents reveals it appears as many as 130 times. It would not be an exaggeration to say it started and ended with ‘supply’.

Even though the government says, "We will provide sufficient housing supply, so please wait," the market remains indifferent. If you think about it, the word ‘supply’ is not commonly used by the public. Words like ‘subscription’, ‘sale’, ‘move-in’, ‘groundbreaking’, and ‘completion’ are much more familiar and common. The government, which claims to communicate with the public to stabilize housing prices, is ironically making policies using words that the public does not use. At this point, it is more accurate to say that the public cannot empathize with real estate measures rather than they do not.

Looking closely at the Ministry of Land, Infrastructure and Transport’s data, the word ‘supply’ is like a code that needs to be deciphered. You have to ask officials, "What does ‘supply’ mean in this document title?" to get a clear answer. For example, in ‘236,000 Housing Units Supply in 3rd New Towns by 2029’ (July 18), ‘supply’ means ‘sale’. Groundbreaking happens simultaneously with the sale. Considering this, even if sales are made by 2029, it will take at least another 3 to 4 years to build. Hidden between the lines is the meaning that it will take more than 10 years from now for all the 3rd New Town apartments to be built and ready for move-in.

The ‘Dundeun Jeonse’ policy, where the government buys villas that suffered jeonse fraud at auction and then rents them out at below-market jeonse prices, also requires interpretation. In ‘HUG Dundeun Jeonse Housing, 16,000 Units Supplied Over 2 Years’ (August 22), ‘supply’ has a different meaning. When asked, the Ministry of Land explained, "The government counts securing ownership of the villa through auction as the supply standard." They added, "It takes some more time to repair housing defects, recruit tenants, and actually move in."

There are cases where contracts with private developers are defined as ‘supply’. The government’s purchase rental policy, where it buys houses built by the private sector and operates them as rental housing, is such an example. In ‘Newly Built Purchase Rental, 110,000 Units Supplied by 2025’ (August 8), ‘supply’ means that the Korea Land and Housing Corporation (LH) has signed a paperwork-based groundbreaking contract with private developers. After the contract, it takes at least 2 to 3 more years to get permits, construct the building, have LH take over the completed building, sell it, and for low-income residents to move in.

As a senior official from the Ministry of Land said, "‘Supply’ is used in various meanings, each different," thinking of supply as synonymous with ‘move-in’ would be a big mistake. It is understood that the government wants to emphasize that many houses will be released into the real estate market as soon as possible. However, packaging all these different standards under the vague word ‘supply’ only hinders the public’s understanding of real estate policies.

Looking at how bank loan regulations have a much greater impact on the market than the real estate supply measures announced repeatedly over the past three months shows how important detailed explanations are. If the well-prepared real estate supply measures fail to have their intended effect due to ‘language issues’, it is a losing proposition even for the Ministry of Land. ‘3rd New Town 236,000 Units Supply by 2029 (×) → Sale (○)’. Whether people immediately understand or not depends on this subtle difference.