Kim Yongbeom Raises 'Real Estate Taxation + Alpha': "Unprecedented Boom Won't Last If Absorbed by Real Estate"

Diagnosing an Unprecedented Boom Thanks to Semiconductors

Surging Purchasing Power Could Flow Into the Real Estate Market

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"Imagination and Execution Are Needed to Connect the Boom to Vulnerable Groups and Future Industries"

Kim Yongbeom, policy chief at the Office of the President, mentioned the possibility that Korea's economy could enter a double-digit nominal growth phase for the first time in over 20 years, stating, "An unprecedented economic boom requires imagination and execution to match." He also warned that although the semiconductor boom, driven by increased investment in artificial intelligence (AI), is pushing up macroeconomic indicators such as stock prices, corporate earnings, tax revenue, and the current account balance, if the fruits of this boom are funneled into asset markets like real estate, it could lead to greater economic and social imbalance.

Policy Chief Kim Yongbeom, accompanying President Lee Jae-myung on his European tour, is briefing on Korea-EU economic cooperation at the Korean Press Center set up in a hotel in Rome, Italy, on the 11th (local time). 2026.6.11 Yonhap News Agency

On June 20, Kim referenced on his Facebook page that the nominal growth rate in the first quarter of this year reached 17.1% year-on-year, saying, "Just looking at the numbers, it’s something to celebrate," but added, "Oddly, I feel a heaviness in one corner of my heart." The last time Korea recorded a nominal growth rate in the double digits was in 2002, the year of the Korea-Japan World Cup.

Kim asserted that this boom is not an illusion. The global explosion in AI investment has driven up demand for semiconductors, sharply increasing the operating profits of Samsung Electronics and SK hynix, sending the KOSPI index above 9,000, and resulting in a current account surplus that is bringing in real dollars. He stated that increased corporate tax revenue has created fiscal space, and the national debt ratio is expected to drop below 50% again. He also noted that the achievement of US$40,000 in per capita national income could come earlier than the originally projected 2028.

However, he described this boom as "unfamiliar." The improvement is not across the entire economy, but is instead represented by figures generated by the semiconductor and AI-related sectors. While the GDP deflator exceeded 10%, the consumer price index (CPI) remained in the 3% range, and although macro indicators are hot, the business sentiment among small business owners remains cold. Regarding the growing gap, with large companies’ operating profits surging while local shops worry about vacancies, he remarked, "While the average is improving, the middle may start to tremble."

He expressed concern about the situation where increased purchasing power is released into the market with a time lag. Kim predicted that after the second half of the year, as the performance of semiconductor companies is finalized and the scale of bonuses becomes clear, consumption and investment sentiment could change. He also noted that with bonuses paid at the end of this year and early next year, wage increases, and the full-scale inflow of export earnings, there is a possibility that luxury consumption and demand for real estate in preferred areas could revive.

He said, "The Korean economy has experienced scenes like this many times over the past several decades," and added, "We have also learned collectively about where liquidity eventually flows." He warned, "If the national wealth generated by semiconductors is absorbed into real estate windfall gains and the fruits of growth are concentrated in the hands of a few, this boom will not last long." He further analyzed that while reasonable adjustments to property and capital gains taxes are needed, in a phase where those with cash are moving, tax policy alone may not be sufficient.

He also addressed the issue of interest rates. Kim stated that if strong nominal growth continues, it will be difficult to maintain current interest rate levels. However, he was concerned that if rates rise, the first to be hit will not be the direct beneficiaries of the semiconductor boom, but rather small business owners, vulnerable borrowers, and those with variable-rate loans who have not felt the effects of the boom. He stated, "The fruits of the boom flow upward, while the pain of tightening flows downward," and added, "The whole country may be doing well, but people themselves may not be happy."

However, he emphasized that there is no need to view the current situation only pessimistically. With tax revenue increasing and the current account surplus building up, unlike in past crises, Korea is not in a situation where it is unable to respond due to lack of funds. He said the key is "where to channel this money," and stressed the need to direct increased fiscal capacity and corporate profits toward youth, vulnerable groups, and future industries.

Kim stated, "Numbers only show direction; they do not make choices for us," and added, "We may have become so accustomed to low growth for so long that we have forgotten how to deal with the problems that come with prosperity." He continued, "In the face of this record-breaking prosperity, which has come for the first time in over 20 years, we are being called upon to make choices we have not faced in a long time."

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