President Lee Jae-myung on the 18th pointed to a drop in housing permits and construction starts since 2022 as the cause of rising home prices in the greater Seoul area, placing responsibility on the Yoon Suk-yeol administration and Seoul Mayor Oh Se-hoon. While citing expanded supply as the core measure for stabilizing prices, he also stressed "firm and swift enforcement of regulatory and tax policies," making clear his intent to maintain the current course of housing policy.
At a press conference held at the Blue House that day, Lee said, "Beginning in 2022, the year the Yoon Suk-yeol government took office, the number of permits and construction starts fell by half," adding that "it was also the year Mayor Oh was elected." He said the resulting short-term drop in supply "became a cause of rising home prices." He also cited the sharp price gains in some districts after Oh lifted land transaction permit zones.
Attributing the price increases to the previous administration and Seoul city policy appears intended to emphasize that recent instability in the housing market is not a problem created since the current government took office, but the result of a supply shortage that has accumulated over several years. At the same time, it appears aimed at highlighting that time is needed before the results of expanded supply become visible.
Lee went on to stress, "What I can say clearly is that this government will normalize the property market." He put weight on supply measures, saying, "We will expand supply as quickly as possible, including building permits, land development, rebuilding and redevelopment, and urban renewal projects." He explained that "the prime minister's office checks on it daily, and I receive weekly reports, identifying specific sites and confirming progress." He also said the government would release data showing an increase in the number of building permits.
As a longer-term measure, he presented a plan to disperse housing demand concentrated in the capital region by relocating state-owned enterprises to provincial areas and moving national government agencies to Sejong. The plan is to complete Sejong as the administrative capital, establishing a "two-capital system" with Seoul as the economic capital and Sejong as the administrative capital, while pushing ahead with the relocation of public agencies to the provinces. It was read as signaling that the government will maintain intact the two-track approach at the heart of its housing policy: expanding supply while curbing speculative demand.
On criticism that housing policy is a major reason for his falling approval rating, he said he would step up efforts to persuade stakeholders. In a Gallup Korea survey of 1,002 voters aged 18 and over conducted nationwide from the 15th to the 17th of this month and released that day, housing policy was the most cited reason for disapproval of the president's performance, at 20%. Housing has ranked at or near the top of the reasons for disapproval for nearly two months since the fourth week of July.
Still, some said Lee's reading of the property market that day was far removed from conditions on the ground. On the recent pattern of falling prices in the Gangnam area and gains in parts of northern Seoul, Lee said, "It appears to be a kind of leveling-out process." In effect, he described as "leveling out" a market in which the three Gangnam districts are weak while gains in mid- and low-priced areas such as Jungnang, Seongbuk, Gangbuk, Dobong and Nowon are pulling up Seoul home prices. Lee Eun-hyung, a research fellow at the Korea Research Institute for Construction Policy, said, "For low- and middle-income households that do not own a home, 'leveling out' may be felt not as housing stability but as a rise in the price of entry." The assessment was that market conditions make the reference to leveling out ring hollow.
Oh responded immediately, asking, "If Oh Se-hoon is the reason Seoul home prices have risen, why was I elected Seoul mayor again, and why does the president's approval rating in Seoul keep falling?" He added, "I hope they will at the very least grasp the reality of what is happening on the ground right now."
His remarks on jeonse (a lump-sum deposit lease) and monthly rent, which bear directly on housing for low- and middle-income households, were also seen as falling short. Lee stressed that "we have prepared and are implementing detailed policies for the difficulties faced by tenants under jeonse and monthly-rent leases," but offered no clear answer. Asked about his own past remarks on jeonse, he focused on correcting the intent of those comments, leaving relatively little of the policy response the market had expected.
Concerned that the controversy would grow, the Blue House issued a separate notice to the press that day, saying the phrase "a kind of leveling out" was "an explanation of the trend in price movements," and that the government "will push supply measures forward with speed and also attend to jeonse and monthly-rent measures, including an expansion of public rental housing."
Separately, Lee reaffirmed a strong commitment to a full survey of farmland. Saying that "the notion that you must be forced to sell if you cannot farm is not true," he stressed that the purpose of the survey is "to identify clear cases of property speculation." He explained that because those who benefit from the farmland survey are scattered while those who face regulation push back in an organized way, opposing voices can sound louder in the course of implementing the policy.
