President Lee Chang-yong: Dispersed housing demand in the capital region is the path to real estate stability

South Korean Bank President Lee Chang-yong stated that dispersing housing demand away from the Seoul metropolitan area is crucial for achieving long-term stability in Korea’s real estate market. During a meeting with the National Assembly’s Finance and Economy Planning Committee, he pointed out that recent government housing policies may have short-term effects, but their long-term impact is unpredictable. This suggests that housing issues cannot be solved solely through policy changes.

President Lee emphasized that, given the increasing household debt related to real estate becoming a significant risk to the economy, it is necessary to reduce its scale. He specifically highlighted the need to improve tax fairness between multiple-property owners and single-property owners and reiterated that this has long been a call for reform.

Currently, the government is attempting to influence the real estate market through policies such as increasing transfer income tax on multiple-property owners and delaying its collection. However, the success of these policies depends on whether they can deliver long-term change beyond short-term effects, which remains uncertain. As President Lee mentioned, it seems necessary to seek more fundamental solutions to alleviate the concentration phenomenon in the Seoul metropolitan area.

Korea’s real estate market’s dependence on the Seoul metropolitan area is deepening, which is leading to increased market instability. In this context, government policies may produce unpredictable consequences, so cautious implementation is required. The future direction of the real estate market, influenced by the policies of the Ministry of Economy and Finance and related agencies, is currently attracting widespread attention.