[Reporter’s Notebook] Why the Pledge Not to Repeat Real Estate Policy Failures Rings Hollow

President Lee Jaemyung's remark during his presidential campaign that he would "not try to control housing prices with taxes" has served as a kind of guideline. Since the change of administration, real estate policies both large and small have largely avoided tax-related measures. While the Deputy Prime Minister in charge of the tax system has toned down the rhetoric to "proceed with caution," he has also taken on the burden of avoiding such measures as much as possible.

On September 29, Minister of Land, Infrastructure and Transport Kim Yoonduk repeatedly emphasized that he was speaking as a private individual, not as a minister, when asked about his views on property taxes during a press briefing. He stated, "As an individual, Kim Yoonduk, I believe property taxes should be increased." He also noted that, since the president has made it clear that property taxes will be left untouched as much as possible, it would not be appropriate for him to comment in his official capacity as the head of the relevant ministry.

While the official assessed value of properties, which affects property taxes, falls under the Ministry of Land, Infrastructure and Transport, the tax system itself is managed by the Ministry of Economy and Finance, so his explanation is generally accurate. There is also precedent from the previous Moon Jaein administration, which faced strong backlash after pushing for stronger property taxes. The frequent policy changes and confusion ultimately contributed to the change in government, a trauma shared by officials from the Democratic Party. Minister Kim’s statement that he would "calmly and comprehensively review the situation before announcing any measures" likely stems from this awareness.

During the briefing, Minister Kim frequently used the term "aftermath." Regardless of intent, his comments acknowledge that, from the Democratic Party’s perspective, these policies became a major reason for the change in administration and, for the public, exacerbated housing insecurity-admitting that the outcomes were negative.

However, his analysis of the causes missed the mark. The diagnosis that the failure was due to "unrefined, one-off measures" is incorrect. Minister Kim’s remarks reveal that the government still has not moved beyond the frame of "a government wasting effort by taking a confrontational stance against the market." After the president's comments on "taxes and housing prices," most people focused on the tax aspect, but what is more important in context is that the idea of controlling housing prices remains firmly in place.

It is not easy to rationally analyze the reasons behind the sharp rise in housing prices. This is due to a complex interplay of various factors, as well as frequent influence from irrational elements. The current situation is no different. Prices surge when land transaction permit requirements are lifted, and they also rise when the government’s supply measures are deemed insufficient. Despite the president’s emphasis on stocks and some people’s success stories with cryptocurrencies, the belief that real estate assets-symbolized by "Gangnam apartments"-are the safest investment remains strong. Now that Minister Kim has announced the possibility of additional regulations depending on market conditions, there is a renewed risk that the sentiment "buy before the government imposes more regulations" will spread again.

The government has identified "some" speculative forces as a key driver of the sharp increase in housing prices and has begun to target them. It has also made it clear that all possible policy options are on the table for consideration. The very impression that the government is preoccupied with controlling housing prices only adds to public anxiety. I am surely not the only one who finds the minister’s pledge not to repeat past failures unconvincing.