Twelve days after Land Minister Kim Yun-deok told a press briefing on the 14th that 73,000 homes would be supplied in the greater Seoul area, the pledge has come undone. The minister was clear at the time that talks with local governments had already concluded and that the units could be delivered within this year. Yet when asked again on the 26th whether those talks had in fact been completed, the answer was only that the ministry would respond later. An explanation followed belatedly: much of the negotiation had been done, but it was not finished. In under two weeks, "completed" had become "in progress."
The government has said it will not disclose specific locations or unit counts, citing the need to block speculative demand. But the apartment market in the capital region has not waited. According to weekly apartment price data for the fourth week of August released by the Korea Real Estate Board on the 27th, the rate of increase in Seoul apartment prices widened to 0.29% from 0.22% the previous week. In Gyeonggi Province, the gain also accelerated, to 0.23% from 0.15%. While officials worried about speculative demand that has yet to materialize, sale prices, jeonse deposits and monthly rents all strengthened at once in a "triple rise" that pushed up home prices even on the outskirts of Seoul. Far from calming the market, the minister's remarks have eaten away at the government's credibility.
Even if the aim was to put out the nearest fire and quiet public anger, it is hard to justify. This was a matter that called for caution instead. Rush out a number, then reverse yourself in less than two weeks, and the next policy package will be met with suspicion from the start. The moment the market stops believing government announcements, policy delivers less than half its intended effect.
The repetition of hollow measures that exist only in words is another problem. Major supply plans — the Yongsan International Business District, the Taereung golf course site, the Gwacheon racecourse site — remain stalled for various reasons, including resident opposition. The announcements were loud; the groundbreakings have been rare. While policy stops at the level of declaration, the property market has already entered an era of every household for itself. People who once looked to the government are turning away and searching for their own way to get by.
At the briefing on the 14th, Kim said it himself: what matters is not numbers for show but the execution and speed of supply policy. If he meant it, what is needed now is not another supply announcement but keeping the promises already made.
