Seoul mayor reacts to president's first-anniversary press conference

Says he will convey concerns about real estate market directly to Lee

Seoul Mayor Oh Se-hoon delivers remarks at the Seoul Young Koreans Challenge spring semester achievement-sharing ceremony held at the Seoul Global Center in Jongno-gu, Seoul, on Saturday. [Yonhap]
Seoul Mayor Oh Se-hoon delivers remarks at the Seoul Young Koreans Challenge spring semester achievement-sharing ceremony held at the Seoul Global Center in Jongno-gu, Seoul, on Saturday. [Yonhap]

Seoul Mayor Oh Se-hoon has called President Lee Jae Myung's remarks on real estate taxation at a press conference a "declaration of war on the public."

Oh made the assessment Tuesday on the YouTube program "Hwang Hyeon-hui's Uncomfortable Yeouido," hosted by JoongAng Ilbo, saying the president's comments at Monday's press conference amounted to a declaration that he would "not change his position one bit."

"The president said he received a warning through this election, but that's contradictory," Oh said. "There should be serious reflection to match that warning, but instead it's: 'A warning is a warning, and I'll just do what I want.' Didn't he insist that jeonse will disappear? Saying jeonse is pushing up real estate prices is seeing only one side of the picture."

Oh said the near-absence of jeonse listings on the market made price increases inevitable. "In a large apartment complex of 1,000 units, there are only one or two listings per floor plan — prices have no choice but to rise," he said. "If you call that 'normalization,' it brings tears to the eyes of people trying to move to a new jeonse home. Wolse supply is also tight, so those prices are set to rise sharply, and real estate taxes get passed on to jeonse and monthly rent tenants with a time lag." He criticized the president for "deliberately turning a blind eye to the fact that those tears fall on ordinary people and the socially vulnerable."

Oh then warned that "something serious is going to happen," arguing that the core problem lies with rental property owners and multi-home holders. "Supply only increases when policy encourages these people to build more," he said. "Existing inventory coming onto the market is not, strictly speaking, new supply."

"Looking at his expression on Monday, I think this is a matter of conviction," Oh said. "I realized this is not something that can be corrected through debate or argument."

Oh predicted that if the president maintains his current position, real estate prices will rise further in six months to a year. "The real estate market is not a matter of debate — the numbers will show it in one or two years," he said. "What good is winning an argument if it is not accepted?"

"Because stabilizing real estate prices is an absolutely critical task for the government as well, I thought that if I spoke sincerely, it might get through," he added. "But seeing Monday's press conference was a real shock."

At his first-anniversary press conference on Monday, President Lee described the decline in jeonse listings and the rise in jeonse and monthly rent prices as part of a "normalization process." He said prices would have "skyrocketed" had the government not intervened verbally starting in January, and assessed that his administration had "done a reasonably good job of holding back upward pressure on real estate." On the jeonse system — a uniquely Korean arrangement — he said it was "a form of private lending that I expect will gradually fade away," and called heavy jeonse lending "the main cause of rising home prices."


jshan@heraldcorp.com