[The Editors' Verdict] One Month After the 9·7 Supply Measures: The Impact Has Already Faded

"I know I have to buy a house, but where would be best?"

This was the consistent question from acquaintances I met during the Chuseok holiday. They asked for advice, fearing that prices would rise even further. The new administration's first housing supply policy, the "9·7 Measures" announced a month ago, was not even on their radar. There was no sign of fear about a decline in housing prices. On the contrary, they expected another surge in prices, similar to the rapid price increase cycles seen under the previous progressive government.

The 9·7 Measures failed to deliver a precise solution. Like my acquaintances, many people are flocking to districts such as Gangnam, Mapo, Yongsan, and Seongdong (commonly referred to as Ma-Yong-Seong) in search of a "smart single property." This is the result of strict regulations that have created a fortress around multi-home ownership, as if becoming a multi-homeowner would be disastrous. Even if it means maxing out loans ("Yeongkkeul," meaning borrowing to the limit), buying a new home in a prime location in Seoul has become the formula for asset growth. Meanwhile, the government announced that somewhere in the Seoul metropolitan area, it would begin construction of 270,000 new homes annually until 2030.

The policy also failed to address the timing gap in supply. The government promised to speed up the process by moving up the construction start date and increasing the floor area ratio. However, this was not a solution to immediately curb soaring home prices. Although these projects were initiated under the previous administration, developments in Seocho-gu's Seoripul area (20,000 homes) and Gwacheon (10,000 homes) could help stabilize prices. However, even the start of construction for these projects is scheduled for 2029. According to the Korea Real Estate Board, the total number of new homes to be supplied from the second half of this year to the first half of 2027 is estimated at about 58,284. Considering that the average annual housing supply in Seoul is 50,000 units, this figure is woefully insufficient. Immediate measures to increase supply are needed.

The gap with the Seoul Metropolitan Government also needs to be narrowed. Citing difficulties in responding promptly to market changes, the Minister of Land, Infrastructure, and Transport announced that the ministry would also be able to designate Land Transaction Permission Zones (LTPZs). The current system makes timely responses difficult. However, the government did not specify who or what has hindered the central ministries from responding quickly. What became clear is that the government will soon regulate areas where home prices are surging. The sense of urgency to buy a home as soon as possible spread rapidly. This acted as fuel for the sharp rise in home prices in areas such as Ma-Yong-Seong.

Now, even districts like Nowon, Dobong, Gangbuk, and as far as Gwangmyeong in Gyeonggi Province are reportedly seeing home prices heat up. The effort to equalize home prices is spreading from less popular areas of Seoul to Gyeonggi Province. Additional measures are urgently needed. However, Minister Kim Yoonduk recently stated at a press briefing that the new administration's real estate policy is a "comprehensive plan created through joint efforts by each ministry." This reflects the intention not to repeat the "consequences of the previous Moon Jae-in administration," which implemented 26 housing price policies. While the intention is good, coordination will take time.

It is also questionable whether any breakthrough will be included. Like the current policy, which came with lending restrictions, the next policy may also be a comprehensive plan to restrict transactions or increase taxes. For LTPZs, legal amendments are needed to grant the necessary authority, and in the case of taxation, the president's stance of "not controlling home prices through taxes" would have to be overturned. However, Minister Kim said, "As an individual, I believe property taxes should be raised." As minister, he cannot act on this, which may indicate that the president's position is too firm.

Now, one month after the 9·7 Measures, the government's promise not to repeat the previous administration's cycle of skyrocketing home prices rings hollow. Before it is too late, a sophisticated policy with clear direction is urgently needed.