President Lee’s Confidence on Housing Market...Opposition Slams It as “Scolding Economics”

[The Financial News] President Lee Jae-myung of South Korea on the 31st expressed confidence after the rise in Seoul apartment prices showed signs of easing, asking, “Does it seem impossible to normalize the real estate market?” In response, the People Power Party (PPP) criticized his remarks as an example of “Scolding Economics.”
President Lee shared a media report on social media that said Seoul apartment prices are turning downward, and asked, “Do you think normalizing what is abnormal and curbing real estate speculation will fail?” He added, “Normalizing the real estate market is much easier and far more important than achieving KOSPI 5,000 or carrying out the valley maintenance initiative,” referring to one of his signature policies as governor of Gyeonggi Province.
Jang Dong-hyeok of the People Power Party (PPP) pointed out on social media the same day that President Lee had previously said, “I get heavily criticized because of housing prices in Seoul and the Seoul metropolitan area, but it seems there is no solution,” and has now reversed his stance. Jang asked sarcastically, “After Hotel Economics Theory, is this now Scolding Economics?”
Hotel Economics Theory is a domestic demand-boosting approach that President Lee promoted during the presidential campaign. The idea is that even if only hotel reservation deposits come in, money circulates within local communities, and that an economic stimulus effect remains even if the reservations are later canceled and no actual spending occurs. At the time, opposition parties and academics strongly criticized the theory, and the new label “Scolding Economics” is being used to mock it.
Joo Jin-woo, another lawmaker from the People Power Party (PPP), also weighed in on social media, saying that when President Lee declared he would “accept criticism without calculating votes,” he was in fact “threatening the public by hinting at tax hikes on real estate.” Joo argued that a tax increase following demand-suppression measures mirrors the policy stance of the Moon Jae-in administration, during which housing prices surged. He went on to stress the need to ease regulations on private-sector redevelopment and reconstruction projects.

uknow@fnnews.com Reporter Kim Yoon-ho Reporter