[Editorial] Semiconductors and Stocks Are Booming, but Domestic Demand and Household Economy Show Warning Signs

Exports are rebounding on the semiconductor boom, and the stock market is gaining momentum. On macro indicators alone, this looks like a sign of recovery. But the economy people actually feel remains cold. The prolonged slump in domestic demand and the difficult job market are drawing complaints. The auction market, which serves as a barometer of household economic conditions, shows the reality at the bottom.
The number of new auction filings submitted to the courts in the first quarter of this year reached 30,541. That is the highest level in 13 years. Most of the properties entering auction belong to the household economy sector.
The surge in commercial property auctions signals that more self-employed businesses are shutting down. Weak economic conditions, combined with the spread of delivery culture, are destroying local commercial districts. The success rate in commercial property auctions is also very low. Even when auction prices fall, there are few buyers, so properties repeatedly go unsold. Residential properties for ordinary households, such as villas and row houses, are also flooding into the auction market. A statistic showing that 72 percent of residential auction cases in April were non-apartment properties confirms this trend. Tenants burdened by jeonse fraud, small landlords whose rental income has shrunk, and self-employed owners forced to close their businesses are ending up in court as auction properties.
The sharp increase in auction listings can be traced back to the COVID-19 period. People who lost jobs and self-employed owners whose sales collapsed relied on loans to survive. The burden of principal and interest accumulated during that time is now spilling into the auction market. A steep series of rate hikes from the second half of 2021 through 2022 delivered the decisive blow. The repayment capacity of struggling household borrowers has crossed a critical threshold, and that is driving the current surge in auctions. News that bad loans at the four major commercial banks have surpassed 5 trillion won points to the same underlying problem.
While the economy at the bottom is groaning, the earnings of major semiconductor companies are improving and the stock market appears to be regaining warmth. The gains from growth are not flowing downward. This kind of polarization can ultimately become poison for the economy. We should not fall into the illusion that strong macro indicators mean everything is fine. That is why more effort must be directed toward restoring the household economy.
The problem is that there are few policy tools available. A rate cut would be the most direct remedy, but the BOK is in no position to move easily toward further cuts amid inflationary pressure and exchange-rate instability. Direct support through fiscal policy also has limits. In the end, the answer lies in finding ways to revive the market from within through deregulation.
People often think first of redistribution as a way to ease polarization. But redistribution simply divides an already baked pie. It may narrow the gap to some extent, but it cannot make the overall pie bigger. What the household economy needs now is not a structure for sharing what already exists, but one that allows people to earn again. The warmth of growth must not remain only with semiconductor giants and financial asset holders. It must flow down to neighborhood businesses and the housing market for ordinary households. Polarization cannot be patched up through redistribution alone. The only fundamental solution is to broaden the field of growth.