Detached from realityThe Moon Jae-in administration has once again resorted to its favorite administrative tool — stifling regulations — to tackle the heated real estate market. In a Blue House meeting Monday, President Moon proposed to establish a real estate market oversight body to help control soaring apartment prices.
Moon’s perception of our real estate market is detached from reality. He claimed to take pride in coming up with a “full-fledged set of countermeasures” to ease deepening public anxieties about soaring real estate prices through “tax reforms to collect unearned income from real estate deals.” The public can only cringe at such clueless self-praise.
We don’t know who advised the president to sound so sanguine about his administration’s real estate policy. But over the past three years, nothing but failure has been evident. The median price of apartments in Seoul has soared by a whopping 52 percent while the prices of jeonse — a uniquely Korean way of renting apartments with long-term deposits — has risen for 56 consecutive weeks. And yet, Kim Hyun-mee, the land minister, said real estate prices have increased only 11 percent over the last three years, which immediately provoked sneers from opposition lawmakers in the National Assembly.
What the president needs is a simple reality check: apartment prices in Seoul — particularly in the posh Gangnam districts — nearly doubled or tripled over three years. Under such circumstances, who would believe his comment that the market is being stabilized thanks to the “gradual effects of the government’s comprehensive measures”?
Moon was proud that the government “hammered out a groundbreaking set of measures to increase supplies for those in need.” Really? Despite the land ministry’s promise to allow the redevelopment of districts in Seoul, existing residents vehemently oppose cheap public apartments in their neighborhoods. That’s not all. On the three controversial bills on leases and rents, both tenants and landlords are unhappy due to their tricky clauses. Moon’s stunning remarks that certain Korean taxes are lower than those in other countries are not true. Taxes should be predictable, and a punitive tax can hardly help stabilize our market.
The watchdog for real estate deals is a dumb idea. Private properties cannot be used as a tool for the government’s ideology-driven and reckless experiments. We urge the administration to return to its senses quickly.