Politicians and legal commentators leveled sharp criticism at a major real estate policy forum hosted by President Lee Jae Myung, questioning both the consistency of government housing policy and the effectiveness of market intervention.
Kim Jong-hyeok, a former senior member of the People Power Party, appeared on CBS Radio's "Park Seong-tae's News Show" on Friday and challenged the premise of the forum. "Prices are determined by supply and demand — neither the government nor anyone else can declare that this price is too high or that price is too low. That is the principle of a free-market economy," he said. "Then what does 'normalizing' stock prices even mean?" Also appearing on the program were attorney Noh Young-hee, attorney Seo Jeong-uk and Ha Heon-gi, a former standing deputy spokesperson for the Democratic Party of Korea.
Kim said the forum appeared to signal a determination to keep intervening in the real estate market under the banner of "normalization," arguing that repeated intervention by progressive administrations had left the market in disarray.
Attorney Noh pointed to the lack of policy consistency, noting that the rules on owning multiple homes had shifted repeatedly. "First they said owning multiple properties was fine, then they said it wasn't, so people ended up concentrating on a single home they could actually live in," she said. "That's where the idea of putting everything into one quality property came from — and now they're saying even that isn't acceptable."
She added that people could only plan their housing decisions around government policy if they trusted it. "People who trusted the policy and acted accordingly deserve at least some protection, don't they?" she said.
Noh also questioned the nature of the forum itself. "Isn't this ultimately a stage set up to raise property holding taxes, with the president hoping people will say what he already has in mind?" she said.
Attorney Seo argued that the ideal form of governance was one of non-interference. "In other words, leave it to the market," he said. "If you leave supply to the market, there are plenty of developers — just lift the regulations and they'll figure it out on their own, because they all want to make a profit."
Ha, the former deputy spokesperson, criticized the lack of consistency in real estate tax policy across successive administrations. "The Roh Moo-hyun government toughened the comprehensive real estate tax, then the Lee Myung-bak government gutted it when resistance grew too strong. The Moon Jae-in government suspended the heavy capital gains tax surcharge saying it would give people a chance to sell, but when backlash intensified and prices surged, the Yoon Suk Yeol government eased it again," he said.
He added that market participants had lost faith in the policy direction. "They think: when the administration changes, the policy will change again — if you hold out, you win," he said.
Ha said he agreed in principle with raising property holding taxes, but warned that hiking holding taxes while transaction taxes remain high would leave property owners with no way out.
Kim also said he agreed in principle with progressively strengthening holding taxes, but returned to the question of trust.
"If the value of your assets rises significantly, it makes sense to pay more in holding taxes on a progressive basis," Kim said. "But what they say has been so inconsistent that this, too, cannot be trusted."
"What on earth is this — some kind of world where the government is all-powerful?" he said.
dbsdn1110@heraldcorp.com
