Rep. Kim Jongyang of the Opposition: "Increase in Money Supply Drove Up Seoul Apartment Prices"

Since the Launch of the Lee Jaemyung Administration,
Average Monthly Money Supply Increased by 17.1 Trillion Won
Seoul Housing Prices Rose 12.5% Compared to Pre-Administration Period

Recent analysis suggests that the recent rise in Seoul apartment prices is linked to an increase in the money supply. In particular, there are claims that since the inauguration of the Lee Jaemyung administration, the rapid expansion of the money supply has driven Seoul housing prices up by over 12%.

On June 17, the office of Kim Jongyang, a member of the National Assembly's Land, Infrastructure and Transport Committee from the People Power Party, announced that an analysis of long-term data from 2013 to 2025 provided by the Bank of Korea and Korea Real Estate Board, along with short-term data from 2024 onward, confirmed a proportional relationship between the growth trend of the money supply (M2) and the rise in the average price of Seoul apartments.

View of Seoul apartments from Lotte World Tower in Songpa-gu, Seoul. Photo by Yonhap News Agency

According to Kim's office, between 2013 and 2025, the money supply increased by a total of 227.7%, or an annual average of 7.08%, while Seoul apartment prices rose by 262.9%, or an annual average of 8.62%. In 2020, when the money supply surged by 12.3%, apartment prices rose by 8.0%. In 2021, when the money supply jumped by 11.9%, apartment prices soared by 28.9%. Conversely, in 2023, when the increase in the money supply slowed to 1.8%, Seoul housing prices also declined by 1.5%, marking a downward adjustment.

Kim's office explained that, in particular, since the inauguration of the Lee Jaemyung administration, the rapid increase in the money supply has coincided with a sharp rise in Seoul apartment prices. According to Kim's office, in the 11 months prior to the launch of the Lee Jaemyung administration, the money supply increased by a total of 13.02 trillion won, averaging about 1.18 trillion won per month. During this period, the average price of a Seoul apartment was recorded at 1.12953 billion won.

However, in the 11 months following the inauguration of the Lee Jaemyung administration, the money supply grew by a total of 18.8 trillion won, with a monthly average increase of 1.71 trillion won, and the average price of a Seoul apartment rose to 1.27062 billion won, up 12.5% compared to the previous period.

Assemblyman Kim stated, "This analysis provides significant evidence supporting experts' claims that indiscriminately released liquidity has flowed into the asset market, driving up housing prices in Seoul." He pointed out that the pace of money supply growth has accelerated since the start of the Lee Jaemyung administration, and as market participants increasingly view Seoul apartments as safe assets amid concerns over currency depreciation, a rapid average monthly price increase of around 1% has continued."

He added, "The government should refrain from excessive supplementary budgets and populist fiscal spending, and should instead focus all policy resources on swiftly promoting private housing supply."

This content was produced with the assistance of AI translation services.