Editorial: September 7 Policy: 82 Weeks of Rising Seoul Prices

It has been one year since the Lee Jae Myung government announced its first real estate supply policy. The September 7 policy, which aims to supply 1.35 million households in the capital region by 2030, was announced just three months after the administration took office. It was significantly faster than the Moon Jae-in government, which took three years and three months to announce its first supply policy for Seoul. However, Seoul apartment prices have risen for 82 consecutive weeks, approaching the Moon administration's record of 85 weeks. The increase during this period was 17%, more than double the Moon government's rate. While Gangnam prices have slowed since the ultra-strong tax reform announced last month, areas such as Jungnang, Seongbuk, Suwon Yeongtong, and Yongin Suji in the northern and southern parts of the capital region are surging. The policy has merely shifted the regions of price increases. In the first half of this year, housing starts in the capital region reached 65,000 households, less than half of the target. This was anticipated from the announcement. Key supply areas like the Gwacheon Racecourse and Taereung Golf Course were announced during the Moon administration but later stalled. Promoting areas with low feasibility cannot lead to proper implementation. Meanwhile, urban supply measures like easing reconstruction and redevelopment regulations have been ignored. The impact of the flawed supply policy is first being borne by tenants, the most vulnerable housing group. With a sharp decline in jeonse (lump-sum lease) supply due to regulations on multiple homeowners and gap investments, jeonse and monthly rents have skyrocketed. The average monthly rent for Seoul apartments exceeded 1.6 million Korean won for the first time since records began. This is the result of anti-market regulations that label even non-resident and high-value single-homeowners as speculators. Evaluations of the government's real estate policies are clearly reflected in approval ratings. The president's approval rating, which was 63% a year ago, recently hit a low of 40%. During the same period, disapproval rose sharply from 28% to 51%. The top reason for disapproval was real estate policy (23%), double that of economic and livelihood issues (11%). The government's hypocritical practice of appointing people who have lived contrary to its policy direction is also eroding policy trust. The nominee for the Ministry of Land, Infrastructure and Transport, who leads real estate policy, is at the center of controversy for borrowing around 500 million Korean won in housing loans and using funds from his in-laws to purchase a house worth around 1 billion Korean won last year, gaining a 400 million Korean won profit. The nominee for deputy prime minister for economic affairs is also under suspicion of holding an apartment in Gwacheon for over 16 years without residing there. Housing price stability begins not with slogans or regulations but with consistent supply and policy trust. The government must acknowledge its failures over the past year, move away from one-sided anti-market demand suppression, and prepare effective urban supply expansion plans. It should also strengthen ethical verification of policy officials to a level acceptable to the public.