Lee Hyung-il, the nominee for deputy prime minister and minister of economy and finance, has said it is "difficult to conclude that demand is speculative based solely on the fact that someone has not lived in a home." Caught up in a controversy over what critics call non-occupancy speculation, the nominee signaled a possible shift away from the Lee Jae-myung administration's punitive stance, which has treated ownership of a single home that the owner does not live in as speculative gap investment — buying a home while a tenant's jeonse deposit covers most of the price. Ahead of a confirmation hearing on the 15th, the nominee also wrote in answers submitted to the National Assembly on the 13th that the government "plans to review unavoidable reasons for non-occupancy with flexibility."
The government's housing regulations, promoted under the banner of stamping out ruinous speculation, have lost much of their credibility as suspicions of speculation surfaced one after another among ministerial nominees in the second round of the cabinet reshuffle. The nominee has held an apartment in Gwacheon, Gyeonggi Province, purchased jointly with a spouse in 2009, for about 17 years, yet has lived there for only four months in total. During that period the apartment, bought for 420 million won, went through rebuilding, and the presale price after completion is expected to reach as much as 85 million won per 3.3 square meters. That is not all. Setting aside Kang Shin-chul, the nominee for defense minister, who faces allegations of a false address registration aimed at securing demolition compensation rights, Hong Ji-sun, the nominee for land, infrastructure and transport minister, and Lee So-young, the nominee for SMEs and startups minister, both of whom built wealth by stretching their finances to the limit with loans and by owning homes they did not live in, are no different from speculators by the government's own standard.
Housing policy so detached from reality that most of the ministerial nominees the president named would fall under speculation rules has also unsettled the market. According to the Korea Real Estate Board, the Seoul apartment sale price index rose for 83 consecutive weeks from February of last year through the first week of September this year, approaching the record 85 weeks set under the Moon Jae-in administration. The average jeonse price for a Seoul apartment in July, as compiled by KB Real Estate, jumped 8.49% from a year earlier to top 700 million won for the first time.
The contradictions and damage of one-sided regulation fixated on actual residence are plain. How can a policy earn public trust when it imposes rules on home transactions and ownership so far removed from reality that even the nominees to lead the ministries that draft and enforce housing policy do not follow them? Even if the government steps back from its blanket view that non-occupancy equals speculation, leaving the overall direction of regulation intact while adding policy uncertainty risks amplifying confusion in the market. If the government is to take responsibility for rising home prices and housing insecurity among low- and middle-income households, it must start by reviewing its residence-centered policy framework from zero base.
