[fn Editorial] Real Estate Policy Confusion—Restoring Trust Begins in the Field

Since the announcement of the October 15 Real Estate Measures, ongoing concerns from the field have led the government to amend some of its policies. As problems emerged in the detailed criteria, market confusion has grown, resulting in a vicious cycle of declining trust in the overall policy framework.
Initially, the government strengthened the Loan-to-Value Ratio (LTV) for housing in 12 districts of Seoul and Gyeonggi Province from 70% to 40%, including loan refinancing within the scope of regulation. Since loan refinancing is technically considered a new loan, the government believed the LTV should be recalculated under the stricter terms. However, this meant that borrowers who previously received loans at a 70% LTV would have to repay large principal amounts at once if they attempted refinancing. The financial authorities belatedly recognized the severity of this issue and decided to restore the original LTV for loan refinancing.
This confusion was not limited to loan refinancing. In the case of Jeonse Refund Loans, which are used by landlords to return deposits to tenants, the lack of clear government guidelines led to further uncertainty. Some banks even refused Jeonse Refund Loans, treating them as subject to regulation, raising concerns that tenants might not be able to recover their deposits. Although authorities recently issued guidelines to allow such loans, the credibility of the policy had already been damaged.
In our society, real estate is both a core asset and a primary means of social mobility. Related policies are the most influential variables affecting prices. Before announcing real estate measures, the government should have thoroughly examined how the policies would impact supply and demand, and ensured that regulations were carefully crafted to protect genuine homebuyers. The ongoing policy confusion is evidence that the government's measures were hastily prepared.
While the government and political circles outwardly call for real estate stability, they have failed to earn the public's trust. Lee Sang-kyeong, the First Vice Minister of the Ministry of Land, Infrastructure and Transport (MOLIT), resigned after sparking controversy with remarks such as, 'If home prices fall, buy then,' and allegations of gap investment. Political parties continue to clash daily over issues such as gap investment by ruling party figures and multiple homeownership among opposition members. Observing the government and politicians embroiled in gaffes and partisan strife, one cannot help but question whether they truly care about citizens suffering from housing problems.
Jin Seok Moon, a member of the Democratic Party of Korea (DPK), recently stressed the need to adjust the frequency of real estate statistics during a National Assembly Land, Infrastructure and Transport Committee audit, stating, 'Current weekly real estate statistics overstate speculative sentiment, and distorted figures are further agitating the market.' The problem is that price data, based mainly on asking prices, is released weekly, fueling anxiety. However, any adjustment to statistics during sensitive times must be approached with caution. Such revisions should have been made before implementing government measures. The government risks undermining its own credibility by making changes under suspicious circumstances. What is needed now is not statistical manipulation, but a thorough review of the measures themselves and prompt follow-up actions.
Just ten days after the October 15 Real Estate Measures were announced, real estate transactions have rapidly frozen. As the supply of Jeonse properties shrinks and the borrowing capacity of genuine homebuyers declines, fears are mounting that the housing ladder will become unstable. The government must now return to basics by closely monitoring transaction practices to enhance transparency and by providing clear signals on supply. The success or failure of policy depends on public trust, and the key to restoring that trust always lies in the field.