"Multiple-home Ownership" 71 Times, "Speculation" 31 Times...Policy Signals Read from President Lee's SNS [Real Estate AtoZ]

Analysis of 25 posts from January 23 to February 21...Directly targeting "multiple-home ownership"
The rise in Seoul apartment prices has slowed to about half its previous pace over the past month

The word that appeared most frequently in President Lee Jaemyung's real estate-related posts on X (formerly Twitter) over the past month was "multiple-home ownership" (including "multiple-home owners"), which was mentioned 71 times. When the president, who bears ultimate responsibility for state affairs, repeatedly brings up a particular keyword, it is interpreted in itself as a signal to the market about the direction of policy. It suggests that the focus of the government's real estate policy is placed on regulating speculative multiple-home owners whose properties are not for owner-occupation.

According to an analysis by The Asia Business Daily on the 22nd of 25 real estate-related posts that President Lee uploaded on X over the 30 days from January 23 to February 21, the words that appeared second most frequently (31 times each) after "multiple-home ownership" were tax-related terms (such as capital gains tax, comprehensive real estate holding tax, and tax system) and "speculation," which tied for second place with 31 mentions each. "Real estate" and "rental" tied for third place with 30 mentions each, while "government" and "normalization" (including "abnormal") tied for fourth with 28 mentions each. "People" appeared 24 times, "special favor/benefit" 24 times, and "loans" 13 times.

During his presidential campaign, President Lee had pushed real estate issues down the priority list, saying, "I will not try to control housing prices through taxes" and "We must follow market principles." However, starting from his New Year press conference last month, he significantly raised the intensity of his messaging. While saying, "Real estate policy through the tax system is a last resort," he also stated, "If things cross the line and become a social problem, it is only natural to mobilize tax instruments," and, "If necessary, we can add as many measures as we need, including the land transaction permit system." Two days later, his real estate-related remarks began to come out in earnest on social media (SNS).

Beyond verbal warnings to practical enforcement...Financial sector loan task force launched immediately

President Lee Jaemyung is speaking at a Cabinet meeting held at the Blue House on the 10th. Yonhap News

The frequency and intensity of presidential remarks on a particular issue serve as indicators of the direction and speed of policy. In this case, concrete follow-up measures ensued. About a week after President Lee first raised the issue of loans to multiple-home owners on the 13th, the Financial Services Commission convened executives in charge of corporate lending from all financial institutions to check the status of loans to rental business operators and their screening procedures, and the Financial Supervisory Service, under instructions from Governor Lee Chanjin, launched a "response to loans for multiple-home owners" task force (TF).

Within just one month, the policy areas covered by President Lee's remarks expanded rapidly. On January 23, he declared the end of the suspension of the higher capital gains tax. On February 8-9, he moved on to the system for purchase-type rental business operators and the abolition of tax breaks for registered rentals. On the 13th, he first raised the issue of extending loans to multiple-home owners, and then, just one week later on the 20th, he directly instructed the Cabinet and the presidential secretariat to review regulatory measures. What began with the tax system spread within a month to rental schemes, finance, and even administrative orders, encompassing all areas.

The terms "special favor/benefit" and "normalization" have been used to justify this expansion of policy. The government's logic is that it is not creating new regulations, but rather restoring to their original state the misguided privileges that fueled speculation. A representative example is defining the end of the suspension of the higher capital gains tax as "the implementation of a principle decided four years ago." President Lee placed the clean-up of illegal valley developments, the KOSPI reaching 5,000 points, and amendments to the Commercial Act all within a "normalization" framework, and then positioned real estate policy as an extension of that framework.

From "What do you think?" to "I have ordered"

As the government has repeatedly confirmed in recent days its policy to end the deferment of the higher capital gains tax for owners of multiple homes, on the 8th a notice about property-related taxes was posted on the glass wall of a real estate agent's office in Jamsil-dong, Songpa-gu, Seoul. Yonhap News

The tone of his remarks has grown increasingly forceful. In the early stages, his posts mainly took the form of questions such as "This is a topic we need to debate" and "What do you all think?" From January 31, however, the tone shifted sharply with statements like, "You will soon realize that this was the last chance." In early February, he expanded his targets, referring to the media with phrases like "nonsense reporting" and "What could be the reason for false reporting?" and criticizing the opposition with "It is time to stop defending nation-wrecking real estate speculation." From February 8 to 10, he presented a specific direction for institutional change: a phased abolition of the special benefit that excluded registered rental housing from the higher capital gains tax (gradual abolition within one to two years, limited to apartments).

On the 13th, the focus shifted into the financial sector. Just one week after he asked, "Is it fair to grant additional loan-extension benefits only to multiple-home owners who, despite receiving years of opportunities including cuts in capital gains tax, have refused to reduce their multiple-home holdings even when their loan maturities come due?" he announced, "I have ordered the Cabinet and the presidential secretariat to review firm regulatory measures regarding the current status of loan extensions and refinancing for existing multiple-home holdings."

Instead of morally blaming individual multiple-home owners, President Lee has cited the responsibility of the political establishment that granted them special favors, as well as the supply-and-demand principles of the rental market, as the grounds for regulation. A representative example is his statement on the 18th that "the social evil is not multiple-home owners, but the politicians who made it profitable."

The previous day, he directly refuted the "rental market crisis" theory emerging in the market. He countered concerns about instability in the rental market due to a reduction in listings by saying, "If multiple-home owners sell, the supply of jeonse and monthly rental units will decrease, but since people without homes will buy those units, demand for jeonse and monthly rentals will also decrease at the same time." He then overturned the very premise of the opposing argument by asking, "If we further increase multiple-home ownership and housing rental businesses beyond current levels, will that stabilize housing for ordinary people?"

Market indicators have also been responding to the barrage of hardline messages. According to the Korea Real Estate Board, the rate of increase in apartment sale prices in Seoul for the third week of February was 0.15%, roughly half the rate in the fourth week of January (0.31%), marking a slowdown for the third consecutive week. The three Gangnam districts also saw their gains narrow, with Gangnam up 0.01%, Seocho up 0.05%, and Songpa up 0.06%. Gwacheon in Gyeonggi Province (-0.03%) turned downward for the first time in 88 weeks, since May 2024.

Tools the Moon administration delayed are being deployed from the outset

However, there have been past cases where the rate of apartment price increases slowed in the early stages of regulation, only for the market to ultimately prevail over policy. In a paper published in 2024 in "Space and Society," the journal of the Korean Association of Space and Environment Research, Lim Minyoung, a senior researcher at the Korea Local Tax Institute, cited three key reasons for the Moon Jae-in administration's failure in real estate policy: the policy contradiction of simultaneously operating higher capital gains tax on multiple-home owners and tax benefits for rental business operators; delays in strengthening property holding taxes due to political burdens; and belated supply measures. The study also concluded that market participants accelerated the policy failure by circumventing the measures, relying on a learning effect that "if we hold out a little longer, housing prices will rise."

The current administration is deploying from the outset tools that the Moon Jae-in administration either brought out late or postponed. It has first moved to abolish tax privileges for rental business operators and has been pushing loan regulations from the early days of the administration. Unlike in the past, when early-term policies focused on curbing demand, thereby heightening supply anxiety and triggering panic buying, the administration announced, just three months after taking office, a goal to supply 1.35 million housing units in the greater Seoul area by 2030. It also upgraded the Public Housing Promotion Team, which had been a temporary, non-regular organization for 21 years, into the "Housing Supply Promotion Headquarters," a first-grade, director-general-level control tower for housing supply, and has even launched a joint task force where the Ministry of Land, Infrastructure and Transport and Korea Land and Housing Corporation (LH) work together in the same location.

Unlike in the past, when frequent policy changes and lack of coordination among ministries opened loopholes for the market, President Lee is personally delivering messages day after day to block the market's "just hold on" mindset. The environment is also more favorable for the current administration because, as capital market returns have risen with the KOSPI surpassing the 5,800 level, the economic incentive to maintain multiple-home holdings while bearing the risks of higher capital gains tax and tighter loan regulations has diminished compared with before.

However, the "strengthening of property holding taxes" that is being discussed in the market has not yet been mentioned by the president. The very uncertainty created by leaving the most powerful policy tool undisclosed is pressuring multiple-home owners to sell. In the market, whether the president will ultimately play this card is being discussed as a variable that could shape the next phase of policy.