The Oct. 15 real estate plan: A circuit breaker for the housing market

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The Oct. 15 real estate plan: A circuit breaker for the housing market

Published: 22 Oct. 2025, 00:01

Audio report: written by reporters, read by AI

Park Sun-young

The author is a professor of economics at Dongguk University.

Each time news breaks about another surge in Seoul apartment prices, a sentence by the late novelist Park Wan-suh comes to mind. In a 1989 column, she wrote, “I am a very timid person. When asked where I live, I hesitate. It is because I live in an apartment whose price has doubled in a year. When I quietly calculate the unearned income, I am seized by the fear that the society I belong to is going insane.” Her “timidity” was not weakness but a moral discomfort with unearned wealth and a sharp sensitivity to a society losing balance. Thirty-six years later, her warning still rings true.

The period Park described — 1988 to 1990 — coincided with the post-Olympic boom. Low oil prices, a weak dollar and low interest rates fueled what was called the “three-lows” prosperity, lifting the economy by nearly 10 percent annually. With a favorable macroeconomic climate, wage increases and Seoul’s population surpassing 10 million, apartment prices in the city soared by more than 25 percent on average over three years.

The government announced strong measures to stabilize the housing market on Oct. 15. The photo shows apartment complexes in central Seoul as seen from Mount Namsan. [YONHAP]

To curb the overheating market, President Roh Tae-woo’s government launched the first phase of new town projects and introduced the “public concept of land ownership.” Neither policy came easily. The new towns faced criticism for hasty development and poor infrastructure, while the land ownership concept triggered an unprecedented political alignment: Opposition parties supported it, while the ruling party resisted. Yet Roh pressed ahead, framing the effort as a commitment to “housing stability for ordinary people.” The first new towns later became recognized as Korea’s most successful housing supply initiative, and the land ownership principle marked the first progressive economic policy under a conservative government — aimed at curbing speculation and easing inequality. Between 1991 and 1995, housing prices remained stable for five straight years.

A view of apartments in central Seoul from Seoul Sky, the observatory at the top of the Lotte World Tower in Songpa District, southern Seoul, on June 29. [YONHAP]

After the 1997 Asian financial crisis, however, housing policy began swinging like a pendulum — tightened in boom times and relaxed during recessions. This reactive cycle fueled market uncertainty and weakened trust in government policy. The deeper problem was that no one believed policy signals would last. The current spike in Seoul apartment prices reflects decades of accumulated skepticism. More fundamentally, housing prices are intertwined with education and job concentration in the capital, delayed industrial transition, low growth, population decline and the hollowing-out of rural areas. Housing supply, taxation, transaction limits or financial controls alone cannot solve what has become a structural problem.

The latest Survey of Household Finances and Living Conditions offers a glimpse into inequality. Based on a long-term panel of about 20,000 households since 2012, it shows the average net assets per household at 448.9 million won ($314,000) in 2024. The top 20 percent hold 1.03 billion won on average, accounting for 46 percent of total household wealth. The bottom 20 percent have 149.7 million won, or only 6.7 percent of the total. With Seoul’s median apartment price around 1.1 billion won, discussions of the city’s housing market largely reflect the concerns of the upper class.

Soaring apartment prices threaten Korea’s long-term stability. When homes along the Han River rise nearly 30 percent in a year, stable housing becomes a distant goal. Speculative “gap investment” in deregulated areas has fueled the latest surge, underscoring the need for a temporary pause. The government’s housing plan announced on Wednesday can serve as a circuit breaker to cool overheated expectations and prevent excessive risk. Still, the measure may buy only limited time. It must be followed by comprehensive steps to restore market confidence and rebuild trust in housing policy.

Former President Roh Tae-woo attends the opening ceremony of the 1988 Seoul Olympics with first lady Kim Ok-suk. [YONHAP]

As the debate over Seoul’s housing prices continues, the lives of young people quietly unravel. Many have been displaced by rental fraud. Others, lured by overseas job scams like the one in Cambodia, fall victim to a system that preys on insecurity. According to the Ministry of Data and Statistics, employment among people in their 20s fell in September, the only age group to record a decline. Their struggles are not personal failures but the result of social neglect.

For Korea’s leaders, the goal should not be to ensure that only their own children thrive, but that all young people can build a future. The moral unease that Park once felt in the face of unearned wealth should serve as a reminder. That sense of “timidity” may, in fact, be the last emotional thread holding our society together.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.