New administration must break the pattern linking Democratic governments and housing price surges
Published: 09 Jun. 2025, 00:00
Audio report: written by reporters, read by AI
![This photo taken March 18, 2025, shows apartment complexes in Seoul. [YONHAP]](https://koreajoongangdaily.joins.com/data/photo/2025/06/09/7ceeee48-8a22-4802-b64e-47654d4d2148.jpg)
This photo taken March 18, 2025, shows apartment complexes in Seoul. [YONHAP]
The Lee Jae-myung administration faces a growing list of economic challenges, and housing has reemerged as a top concern. According to the Korea Real Estate Board, apartment prices in Seoul rose by 0.19 percent in the first week of June, marking the 18th consecutive week of increases. The pace of growth was the fastest since mid-March, just before the Seoul Metropolitan Government expanded land transaction permit zones to include the Gangnam, Seocho, Songpa and Yongsan districts. The upward trend in prices is now spreading beyond Gangnam to districts such as Mapo, Yangcheon and Gangdong.
The market’s heat is also visible in transaction volumes. Apartment sales in Seoul totaled 5,478 in May, already exceeding April’s figure with more than 20 days remaining in the reporting period. Analysts project that final May figures could surpass 7,000 to 8,000. Despite the expansion of land transaction regulations, buying activity has increased in the most tightly controlled areas. These districts are also reporting record-high sales prices, adding to the upward pressure.
The recent spike is driven in part by buyers rushing to secure loans before the next phase of the government’s stricter debt service ratio rules takes effect next month. Expectations for further interest rate cuts by the Bank of Korea, combined with prospects of increased liquidity through the Lee administration’s supplementary budget, are also fueling demand. Rising rent prices and higher pre-sale prices for new apartments are amplifying anxiety among potential buyers and investors.
Another destabilizing factor is the lingering public perception that housing prices tend to rise under Democratic Party governments. Past punitive taxation and restrictive housing policies aimed at curbing speculation ended up pushing prices higher. The Moon Jae-in administration’s crackdown on multi-home ownership only intensified the shift toward owning a single “safe” asset in core locations, deepening the divide in the housing market. Meanwhile, the market for villas, officetels, and properties in provincial areas has weakened significantly. The average price gap between apartments in Seoul and Busan has widened from 2.1 times to 3.5 times over the past decade.
![A loan section at a bank in Seoul [NEWS1]](https://koreajoongangdaily.joins.com/data/photo/2025/06/09/49564764-8689-4423-984f-47335ec256de.jpg)
A loan section at a bank in Seoul [NEWS1]
The government must act swiftly to cool overheated expectations. The key is to offer a reliable housing supply plan. Policies should build on existing frameworks while seeking ways to expand supply through regulatory reform. As President Lee stated, “We will not attempt to control prices with taxes.” The administration must avoid the kinds of punitive policies that stirred markets in the past. It is time to break the expectation that home prices will inevitably rise under a Democratic presidency.
Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.
with the Korea JoongAng Daily
To write comments, please log in to one of the accounts.
Standards Board Policy (0/250자)