President orders public purchase system to guard against price crash; calls for correction of 'unfair' tax regime

President Lee Jae Myung speaks at the "Youth Budget Unboxing 2027" event held at Cheong Wa Dae on Friday. [Yonhap]
President Lee Jae Myung speaks at the "Youth Budget Unboxing 2027" event held at Cheong Wa Dae on Friday. [Yonhap]

President Lee Jae Myung said Sunday he would mobilize the full resources of the state to stabilize the real estate market, pledging an early and large-scale housing supply push in the Greater Seoul area and measures to curb speculative demand. He also issued a stern warning to property speculators, citing interest rate normalization and a rise in mortgage delinquencies and foreclosure auctions.

Writing on X (formerly Twitter), Lee said those with an interest in real estate speculation should pay close attention to projections that the Bank of Korea's policy rate could reach 3.5 percent in the first quarter of next year — six months from now. "The direction of interest rates is hard to predict with certainty, but one must consider the level of US rates, the inverted rate relationship between the two countries, and the fact that the low growth that had been blocking rate normalization is being overcome rapidly," he said.

He added that another factor to watch was the sharp increase in mortgage delinquencies and properties going to auction, urging readers to also monitor auction clearance rates. "The government will mobilize all national capacity not only for financial and tax reform, but also for expanding and accelerating housing supply," he said.

Lee framed the expansion of housing supply in the Greater Seoul area as a core policy for reviving domestic demand and overcoming K-shaped polarization. "In the short term, an early expansion of housing construction is the best tool for overcoming the shortfall in domestic demand and the limits of K-shaped growth, so early mass supply of housing in Seoul and the metropolitan area is a two-birds-one-stone policy that must be carried out," he said. He added that the government would grant district mayors licensing authority over developments of 500 units or fewer and provide maximum incentives for early permitting and ground-breaking.

Responding to criticism of lending policy, Lee said expanded financing to boost housing supply and increased loans for genuine end-users such as young people were valid and necessary targeted measures. He said the Ministry of Land, Infrastructure and Transport would increase its housing supply staffing and work to identify every available plot of land, however small. "We will increase supply as quickly as possible, as if we are, in the minister's words, 'crazy from not being able to supply,'" he said, adding that the prime minister was reviewing progress daily and Cheong Wa Dae was conducting regular checks.

Lee also reaffirmed his administration's commitment to easing the concentration of activity in the capital region through the construction of Sejong as an administrative capital, large-scale relocation of public institutions to the regions, and what he described as three major mega-projects and seven seed policies.

He said he had also ordered the preparation of safeguards against sudden market swings. "To protect the nation's future and the hopes of the next generation, we must eliminate the risk of the real estate speculation hot-potato game and a 'lost 30 years,'" Lee said. He said he had directed officials to prepare a system for the large-scale public purchase of homes below a certain threshold — to be held as public housing stock — in the event that prices collapse due to a combination of early mass supply, suppressed speculative demand, and a surge in high-interest delinquencies and foreclosure auctions.

On the nature of reform, Lee said the government should carry out necessary changes quietly and swiftly using the mandate already granted by the people, rather than making loud proclamations that would heighten the anxiety and resistance of vested interests. "Making demands is the role of those who are challenging for power; the role of those who have already won it is action and results," he said.

He went on to say the people's sovereignty government would use every means necessary to stamp out what he called ruinous real estate speculation, and would also correct the unfair and irrational tax regime that had been shown to fuel it — "if only in the name of tax justice," he added.


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