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Shaking off the déjà vu of failed housing policies

Published: 03 Feb. 2026, 00:02 Updated: 06 Feb. 2026, 18:25

Suh Kyoung-ho

The author is an editorial writer at the JoongAng Ilbo.

President Lee Jae Myung has been using social media almost daily to broadcast his determination to stabilize housing prices “by whatever means necessary.” He has even said the task is no harder than reaching a Kospi 5,000. Addressing owners of multiple homes, he urged them not to “unfairly resist government policy and end up losing money like a leveraged inverse ETF,” but instead to sell now and take advantage of what he called a final tax break in the form of exemptions from capital gains tax surcharges.

President Lee Jae Myung speaks during a Cabinet meeting at the presidential office in Seoul on Jan. 27. He said the government must "correct the distortion in resource allocation caused by society’s excessive concentration on real estate." In a post on X later that day, Lee wrote, "There is no government that can defeat the market, but there is also no market that can defeat the government." [JOINT PRESS CORPS]

Few would fault a president for showing resolve and interest in stabilizing housing prices. Since taking office, this administration has unveiled four real estate measures, including the Jan. 29 supply plan to build 60,000 homes in the capital region. Yet creating supply takes time and faces resistance from local governments and residents. New apartments cannot appear overnight, so existing homes must come onto the market. The president’s all-out social media campaign looks like a psychological strategy, pressuring owners of multiple homes to release inventory while calming would-be buyers still eyeing Seoul apartments despite land transaction permit rules.

And yet the president’s confidence inevitably triggers déjà vu. In 2005, President Roh Moo-hyun declared that he would “definitely rein in real estate, even if the sky were to split in two,” and questioned how long buyers of Gangnam redevelopment apartments could keep smiling. Those buyers are now cited as some of the most successful investment cases in Korea.

President Moon Jae-in was no less confident. In 2019 he said he was certain his government could handle the housing problem. In an interview in early 2020, then-policy chief Kim Sang-jo repeatedly stressed confidence in real estate policy, calling the Roh administration’s failure a “trauma” and saying that success elsewhere would mean little if housing failed. Despite such caution, Moon’s government ended up repeating many of the same mistakes.

Why did the Moon administration fail? It took office during a housing upswing but failed to sufficiently tighten real estate lending, even as liquidity surged. It did not quickly calm fears of supply shortages. Confusion over higher holding taxes and the rental business program eroded policy credibility and leadership. Unrealistically raising the comprehensive real estate tax and aggressively pushing assessment normalization fueled ideological controversy and resistance to regulation, undermining trust in policy, as Kim Soo-hyun later wrote in “Real Estate and Politics” (2023).

In that book, Kim Soo-hyun went so far as to argue that governments should stop promising to control housing prices. He noted that leaders often pledge to rein in prices, especially in Gangnam, as a way to soothe public sentiment and wage psychological battles with the market, but such vows invariably prove empty. Among advanced economies, he observed, it is rare for heads of government to claim they can control home prices or to apologize for failing to do so.

The total market capitalization of Seoul apartments surpassed 1.83 quadrillion won ($1.26 trillion) at the end of 2025, marking an all-time high. The photo shows apartment complexes in central Seoul as seen from Mount Namsan on Jan. 6. [NEWS1]

The Lee administration appears to have drawn lessons from that experience. Strict lending rules, supply plans criticized as encouraging heavy borrowing and repeated statements that taxes are a last resort all reflect that learning process. For market anxiety to subside, Jan. 29's plan must work. The government must go all out to persuade local authorities and residents, giving buyers confidence that waiting is a rational choice. The president should mobilize officials with the same zeal he showed as a provincial governor cleaning up illegal resorts along mountain valleys. Using holding and transaction taxes simply to suppress prices should be avoided, but correcting a skewed tax system that has encouraged the “one solid home” phenomenon is a task the government must undertake in the name of balance and fairness.

One of the president’s social media remarks stands out. “Is normalizing a ruinous real estate system truly impossible? All it takes is trusting the public and enduring criticism without calculating votes.” He should push ahead resolutely with tax rationalization, including housing taxes. Labor reform suited to an AI and robotics era and fiscal and pension reform that future generations can accept also demand long-term commitment beyond short-term political gain.

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.