President Lee: "Prepare a system to buy homes in bulk in case of a sharp fall in housing prices"

[Financial News] President Lee Jae Myung said on the 30th, "The Government of the People will definitely break ruinous real estate speculation, no matter what it takes." He also said, "Unfair and irrational tax systems that have been shown to encourage real estate speculation will also be corrected, at least from the standpoint of tax justice." Reiterating his commitment to an early, large-scale housing supply in Seoul and the Capital Region, he said he had instructed officials to prepare a system that would buy homes in bulk for public housing use in case prices collapse.
President Lee shared a news report on X, noting that Morgan Stanley had raised its growth forecasts for South Korea's gross domestic product (GDP) this year and next year, while the Bank of Korea's benchmark rate was expected to rise faster than anticipated amid inflationary pressure and reach 3.5% by the end of the first quarter next year. He wrote, "Those interested in real estate speculation should pay particular attention to the part in the article that says the BOK's rate is expected to be 3.5% in the first quarter of next year, six months from now. It is hard to predict the direction of interest rates, but we must consider the U.S. rate level, the rate relationship between the U.S. and South Korea, and the fact that low growth, which had blocked rate normalization, is being overcome quickly."
He stressed that "the government will mobilize all state capabilities not only for financial and tax reforms, but also to expand housing supply and ensure swift delivery." He added, "In the short term, early expansion of housing construction is the best way to overcome weak domestic demand and the limits of a K-shaped economy, so the early, large-scale supply of homes in Seoul and the Capital Region is a win-win policy and must be carried out."
He also said, "In the Capital Region, especially Seoul, housing permits and groundbreakings have fallen sharply for more than three years since 2022." He added that the government would provide the maximum possible incentives for early permits and construction, including granting district heads authority to approve projects of fewer than 500 units.
He rejected criticism that the government's plan to expand total lending runs counter to its push to tighten financial regulation. "Expanding finance to increase housing supply, and increasing loans for end users such as young people, are effective and necessary targeted policies," he said. "There is finance that increases housing supply, and there is finance that increases housing demand."
He also reaffirmed plans to ease concentration in the Capital Region. "Early relocation of national agencies to Sejong City, swift construction of the administrative capital, early relocation of the largest possible public institutions to regional areas, and the early realization of the Three Mega Projects and the Seven Seed Policies will all greatly help stabilize the real estate market in the Capital Region," he said.
He added, "The government has instructed officials to prepare a system that will buy homes in bulk for public housing use in case housing prices collapse due to early large-scale supply, suppression of speculative demand, and a surge in loan delinquencies and auctions caused by high interest rates."
Regarding the way reforms should be pursued, he said, "Making arguments is the role of those challenging for power, while the role of those who have already won power is to deliver action and results." He added, "With the power already entrusted to us by the people, we should quietly and swiftly carry out the reforms needed by the people and the country."
[email protected] Choi Jong-geun Reporter