Concern over the government's real estate measures spilled into both the ruling and opposition camps Friday. The People Power Party called for deregulation, arguing that actual housing supply remains insufficient, while divisions within the Democratic Party of Korea surfaced along constituency lines over proposed tax reforms.
PPP floor leader Jeong Jeom-sik, speaking at a floor strategy meeting Friday, criticized the government's housing supply package announced Thursday as "already the third policy, but the content is always the same rehash. The only new element is 1,000 units in Gangseo-gu."
He added that the measures amounted to "a long-term plan with no telling how many years it will take to break ground," saying the Lee Jae Myung administration had "missed the timing by clinging stubbornly to a public-sector-led housing supply approach."
Jeong also stressed the need for differentiated prescriptions for the greater Seoul area and the regions. "If the metropolitan area is suffering from a supply shortage and a triple surge in prices, the regions are awash in unsold units wherever you go," he said. "We must fundamentally pursue decentralization and balanced regional development. For now, real estate policy needs a two-track approach — one for the metropolitan area and one for the regions."
For the greater Seoul area, he said the priority should be a stable supply through revitalizing reconstruction and redevelopment projects, while the regions need eased restrictions on multi-home ownership along with tax and financial support.
The meeting drew attention for the presence of Seoul Mayor Oh Se-hoon. Oh said housing is "clearly the most pressing livelihood issue in Seoul right now," adding that residents "cannot find a jeonse unit where they want to live, are saddled with unaffordable monthly rent, and find homeownership slipping further out of reach."
Oh offered a mixed assessment of the government's package, welcoming some regulatory improvements while flagging its limits. "It is at least encouraging that some of the regulatory improvements to urban renewal projects that Seoul has repeatedly requested were reflected in the government's real estate measures," he said. "But it is not desirable to exclude Seoul — the city that actually implements housing supply on the ground — from the policy decision-making process."
He called for "bold deregulation to improve project viability and accelerate timelines," and urged a full review of what he described as an "actual-residency obsession policy that is destabilizing the lease market and deepening public hardship."
The PPP plans to continue discussing real estate issues at future floor strategy meetings with the governors of Daegu, North Gyeongsang Province, South Gyeongsang Province and other local governments.
Divisions were also visible within the Democratic Party. The party moved to begin follow-up discussions on legislation to back the government's supply, tax and financial measures, but lawmakers' interest and stakes in the policies varied sharply by constituency.
At a closed-door Democratic Party caucus Thursday, policy committee chair Han Jeong-ae briefed members on the government's real estate tax reform proposals and supply measures. Some lawmakers left the meeting early. One lawmaker from a non-metropolitan constituency said, "There are no high-end apartments in my district subject to the comprehensive real estate tax on properties worth 3 billion won ($2.12 million) or more," adding, "It's not my issue, so I left."
Lawmakers from Seoul and Gyeonggi Province, by contrast, focused intently on the tax reform proposals. Concerns were particularly concentrated among Seoul-based members. Rep. Jeon Hyeon-hui of Jung-Seongdong-gap in Seoul argued that the long-term holding special deduction on capital gains tax for non-resident single-home owners should be restored to its original level.
Rep. Seo Yeong-gyo of Jungnang-gap in Seoul also raised concerns about a proposal to differentiate the basic deduction threshold for the comprehensive real estate tax on single-home owners — setting it at a publicly assessed value of 1.4 billion won for owner-occupants and 900 million won for non-residents. Seo was said to have expressed the view that single-home owners should not be divided into resident and non-resident categories.
As the discussion remained focused on Seoul's real estate market, frustration emerged among non-metropolitan lawmakers. Rep. Lee Gwang-hui of Cheongju Seowon in North Chungcheong Province said there was "irritated pushback along the lines of, 'Is the Democratic Party a metropolitan party?'"
Some within the party acknowledged that a so-called "wedge strategy" targeting high-end property holders may be unavoidable. One ruling-camp insider said, "Ultimately, I think it will come down to a 70-30 split — taxing holders of ultra-high-end properties with a holding tax while activating that wedge framing." The idea is that raising holding taxes on expensive homes could encourage owners of prime-location properties to list them, but the party would need to avoid criticism that simultaneously lowering transaction taxes restricts residential mobility.
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