President Lee: "We Will Eradicate Real Estate Speculation by Any Means"...Accelerating Tax Reform and Housing Supply

Rising Interest Rates, Mortgage Delinquencies, and Foreclosures Cited Directly
"Those Interested in Real Estate Speculation Should Be Cautious"
Determination for Early, Large-Scale Supply in Seoul and the Metropolitan Area
Plan to Grant District Mayors Approval Authority for Projects with 500 Units or Fewer
Downside Safeguard: Large-Scale Public Purchases if Housing Prices Plunge
Administration, Ruling Party, and Blue House Counter Criticism of Policy Disarray... Emphasis on "Quiet Reform"

On August 30, President Lee Jae-myung stated, "We will do whatever it takes to eradicate the nation-destroying real estate speculation," and announced that the full strength of the nation would be mobilized for financial and tax reforms, as well as for the early large-scale supply of housing in Seoul and the metropolitan area. He explained that the government will curb the upward pressure on housing prices by expanding supply and suppressing speculative demand, but if the market falls sharply, the government will implement a "downside safeguard" by making large-scale public purchases of housing. He also presented his administration's guiding principle for the second year in office: to deliver results "quietly and quickly" rather than fueling unnecessary conflict over reforms.

President Lee Jae-myung is speaking at the 'Youth Budget Unboxing 2027' event held at the Blue House on the 28th. This event was organized to explain the youth budget and key projects ahead of the government budget announcement for next year. August 28, 2026. Photo by Yonhap News Agency

President Lee made these remarks in a lengthy post on X (formerly Twitter), saying, "We will correct the unfair and unreasonable tax system that has been found to encourage speculation, as a matter of tax justice." He emphasized, "For the future of the nation and the hope of the next generation, the game of passing around real estate speculative assets and the danger of a lost three decades must be eliminated."

Amid recent discussions on the government's direction in reforming real estate taxes, the Democratic Party has continued to call for broader recognition of "inevitable non-residence" as a reason for non-resident one-home owners. Both the government and the party are reviewing additional detailed criteria. However, by reiterating his commitment to correcting the "unfair and unreasonable tax system," President Lee made clear his intention to uphold the core principle of tax reform for curbing speculation, regardless of adjustments or supplements made to the policy details.

Regarding the housing supply policy, President Lee said, "The government will fully mobilize national resources not only for financial and tax reforms, but also to expand the volume of housing supply and accelerate delivery," stressing that "the early, large-scale supply of homes in Seoul and the metropolitan area is a dual-purpose policy and will be implemented without fail."

He also announced plans to adjust authority to resolve regulatory bottlenecks in approvals for Seoul. President Lee noted, "In the metropolitan area, especially in Seoul, permissions and groundbreakings for housing have plummeted for three or more years since 2022." He added, "Incentives of all kinds will be maximized to enable early approvals and groundbreakings, including granting district mayors the authority to approve projects with 500 units or fewer."

He instructed the Ministry of Land, Infrastructure and Transport to increase staffing for supply and to discover every additional available housing site, even if small in scale. President Lee explained, "We are impressing upon the ministries that increasing the housing supply—by even one more unit—is not only an effective housing policy, but also a multi-billion-won policy for job creation and welfare." Quoting Minister Kim Yoon-deok, he said, "We will accelerate supply as though we are 'crazy for supply,'" adding, "The Prime Minister reviews progress daily, and the Blue House is conducting regular inspections as well."

President Lee also sent a warning message to the real estate speculation market. He stated, "Those interested in real estate speculation should pay particular attention to the news that the Bank of Korea's interest rate is expected to be 3.5% in the first quarter of next year." He emphasized, "The government neither controls nor is allowed to control interest rates, but it is important to consider that the low growth, which had blocked rate normalization, is being quickly overcome." He added, "Another point of caution is that delinquencies on mortgage loans and the number of foreclosed properties are increasing significantly." He urged, "Please also pay attention to auction success rates." This appears to point to the recent renewed activity in the speculation market as expectations for rising housing prices have increased.

President Lee also directly responded to criticisms over a "policy disconnect," which have emerged as the government both strengthens controls on household lending and expands overall policy finance. He said, "Expanding policy finance to increase housing supply and expanding loans targeting actual demand, such as youth, are valid and necessary targeted policies." He argued that funds used to purchase homes and funds provided to builders should not be collectively categorized simply as "loan increases."

He criticized some media reporting, saying, "There is both financing to increase housing supply and financing to increase housing demand, but some only think of 'loan increase = demand increase = price rise,'" and added, "In some cases, media intentionally incites public opinion or attacks the government despite knowing both sides."

President Lee also said he would pursue structural measures to alleviate the concentration in the metropolitan area. He emphasized, "I will focus on easing the concentration in the metropolitan area, which is the fundamental driver behind rising housing prices," listing the early relocation of national institutions to Sejong, the rapid construction of the administrative capital, the largest-ever transfer of public institutions to regional areas, fast-tracking of the three mega projects and seven seed policies, among others.

The newly highlighted aspect of his message was the plan to prepare not just for price increases, but also for a potential "plunge" in the housing market. President Lee said, "I have instructed preparations for a system to enable the government to make large-scale purchases of homes below a certain price threshold for public housing, as a contingency in case house prices crash due to early large-scale supply, speculation suppression, and a surge in delinquencies and foreclosures induced by high interest rates."

This means the government intends to curb speculative expectations and price rises through its policy while still preparing for a possible sharp downturn driven by expanded supply, high interest rates, and more foreclosures. The goal is to prevent not only price rises, but also a steep price collapse and the ensuing shock to the financial and real economies—representing a "two-way market stability" plan.

Regarding the approach to real estate reform, President Lee emphasized "quiet reform." He said, "Reforms that change existing systems and practices—such as tax reform, real estate reform, or healthcare reform—are said to be even harder than revolutions, due to the anxiety, distress, and resistance from those who lose vested interests under the old system."

He continued, "With power already entrusted by the people, we must quietly and swiftly deliver the reforms needed by the people and the country, without unnecessarily proclaiming our resolve or achievements in ways that only increase the anxiety and resistance of vested interests." He especially stressed, "Assertion is the responsibility of those seeking power. But for those who have already won power, the responsibility is action and results."

President Lee declared, "Public trust in political groups will come down to who has actually delivered, or can deliver, a better life and welfare for the people." He added, "Let us together strive for an irreplaceable Republic of Korea that overcomes all its anomalies and achieves a golden age for Korea, as Jensen Huang said."

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