[Political Lens] The Dogma of "Controlling Housing Prices Equals a Drag on Approval Ratings" Faces a Test

President Lee's Approval Rating Hits Record High Since Taking Office: 67% Respond Positive

Stabilizing Housing Prices Boosts Support

Clarity and Predictability of Policy Shift the Trend

Stock Market Emerges as a Key Alternative Investment Channel

President Lee Jae-myung is speaking at the Senior Secretaries' Meeting held at the Blue House on the 26th. Photo by Yonhap News Agency

"Dismantling the nation-destroying real estate republic is by no means an insurmountable barrier."

President Lee Jaemyung's remarks at the Senior Secretaries' Meeting at the Blue House on the 26th encapsulate his governing philosophy regarding real estate issues. The perception in political circles that election outcomes are unfavorable to the Democratic Party whenever real estate becomes a major political issue is currently being put to the test.

Since the end of January, President Lee has been directly delivering strong messages targeting the real estate market. Under this leadership, with real estate pushed to the forefront, his approval rating for state administration has reached its highest level since taking office.

According to the National Barometer Survey (NBS), conducted by Embrain Public, KSTAT Research, Korea Research, and Hankook Research from the 23rd to the 25th among 1,002 adults aged 18 or older and released on the 26th, the positive evaluation of state administration rose by 4 percentage points from two weeks ago, reaching 67%. This upward trend in approval ratings is also reflected in other polls such as those by Gallup Korea. The NBS was conducted via mobile phone interviews, with a sample error of ±3.1 percentage points at a 95% confidence level. For details, refer to the website of the Central Election Poll Deliberation Commission.

It is unusual for the approval rating to rise even as the Democratic Party government accelerates strong real estate policies, especially those aimed at stabilizing housing prices. The Roh Moo-hyun administration pushed for stabilization through a higher capital gains tax, a price cap on new apartments, designating overheated districts in the Seoul metropolitan area, and implementing a comprehensive real estate tax, yet apartment prices soared. The Moon Jae-in administration announced real estate policies 28 times, increasing public fatigue, and failed to prevent a plunge in approval ratings.

The reason for the shift in trend under the Lee Jaemyung administration can be summarized in three points: △clarity of policy △predictability △alternative investment options. The clarity of policy was demonstrated during the process leading up to the scheduled end of the capital gains tax exemption for multi-homeowners on May 9, which bolstered public trust. After preparing minimal supplementary measures reflecting the realities faced by multi-homeowners, the government passed the revised tax law enforcement decree at the Cabinet meeting on the 24th. An official from a real estate development and consulting firm commented, "By quickly resolving the controversy over the end of the capital gains tax exemption, the on-site sentiment shifted rapidly."

Predictability has also improved. The Lee Jaemyung administration has emphasized productive finance, vowing to channel liquidity concentrated in the real estate market into the capital market through what it calls the "Money Move." According to the Bank of Korea's Consumer Survey released on the 24th, the Housing Price Outlook Index (CSI) for February plummeted by 16 points in a single month to 108. This has now made the fall in housing prices in the previously invincible Gangnam 3 Districts and Yongsan a reality.

Changes in the "alternative investment" environment have also played a role in shifting public opinion. The KOSPI hit a new all-time high by surpassing 6,000 points on the 25th, driven by the passage of the third Commercial Act amendment mandating the cancellation of treasury shares. Unlike in the past, when real estate was seen as the only viable option, channels for funds to move into stocks, Individual Savings Accounts (ISA), and Comprehensive Asset Management Accounts (CMA) have now widened.

Depending on whether the end of the capital gains tax exemption for multi-homeowners on May 9 leads to an increase in property listings and thus "price adjustments," or whether it results in instability in the rental market, public sentiment may shift in different directions. An official at the Blue House stressed President Lee's determination to push through policies, saying, "When President Lee is convinced something is right, he digs vertically into even the most detailed policies and pushes forward until the changes are felt on the ground."

This content was produced with the assistance of AI translation services.