'Supply measures to be pushed with urgency; jeonse and monthly rent to be addressed carefully, including expansion of public rental housing'

President Lee Jae Myung answers reporters' questions at a press conference held at the Yeongbingwan of Cheong Wa Dae on Friday. [Yonhap]
President Lee Jae Myung answers reporters' questions at a press conference held at the Yeongbingwan of Cheong Wa Dae on Friday. [Yonhap]

Cheong Wa Dae on Friday clarified that President Lee Jae Myung's use of the term "flattening" to describe the real estate market during a press conference was intended as "an explanation of price movement trends."

Earlier that day, Lee had described a divergence in housing prices — with values in the three Gangnam districts declining while prices in Gangbuk and outlying areas edged up — as "a kind of 'flattening' process, where Gangnam comes down and the outskirts rise slightly."

The remarks drew criticism from some quarters, who questioned whether the president showed sufficient awareness of rising housing costs in areas where relatively lower-income residents tend to live.

In response, Cheong Wa Dae said Lee's comments were not meant to cast the rise in housing costs in certain areas in a positive light, but rather to describe recent regional trends in housing price movements.

Cheong Wa Dae added that "the government takes seriously the growing burden on the public from rising housing prices in Seoul outside the three Gangnam districts." It attributed the trend primarily to a chronic shortage of new housing supply — particularly a lack of new move-ins in Gangbuk — as well as concentrated demand for mid- to low-priced homes less affected by tax reforms focused on ultra-high-end properties and loan limits.

"The government will push supply measures with urgency and will carefully attend to jeonse and monthly rent measures, including expanding public rental housing," Cheong Wa Dae said.

At the press conference, Lee said declines that began in Gangnam and surrounding areas had continued to spread while outlying areas were rising slightly. He added that the market had shifted from "a vertical structure where Gangnam was at the top and everywhere else was lower" to one where "Gangnam is coming down and the outskirts are going up — a kind of 'flattening' process."

Lee said escaping what he called South Korea's "real estate speculation republic" was the central task of his administration, declaring: "Everyone has tried and failed, but what I can say clearly is: this government will do it." He said the government would "expand supply as quickly as possible through land development including building permits, and reconstruction and redevelopment." He added that the Prime Minister's Office conducts daily checks while he personally receives progress reports on specific sites every week.

Lee also pointed to a contraction in housing supply that began under former President Yoon Suk Yeol and Seoul Mayor Oh Se-hoon as a short-term cause of rising housing prices in the Greater Seoul area. "In the short term, 2022 was the year the Yoon Suk Yeol administration took office — and also the year Oh Se-hoon was elected mayor," Lee said. "From that year, the number of permits and ground-breakings was cut in half."


sang@heraldcorp.com