Choi Kyunghwan: "No Government Can Beat the Market"... Urges Shift in Lee Administration's Real Estate Policy

Capital Region Housing Innovation Forum seminar co-chaired by Cho Junghoon and Lee Junseok
Choi proposes abolishing mortgage loan cap, easing tax burden on multiple-home owners

Former Deputy Prime Minister for Economic Affairs Choi Kyung-hwan criticized the Lee Jae-myung administration’s real estate policies on November 11, calling for eased lending restrictions and expanded private-sector housing supply. He argued that uniform lending restrictions and a slowdown in housing transactions were fueling housing insecurity and that a fundamental shift in policy direction was needed.

Choi made the remarks as the keynote speaker at the third policy seminar of the Metropolitan Housing Innovation Forum, held at the National Assembly on November 11. People Power Party lawmaker Cho Jung-hoon and Reform Party lawmaker Lee Jun-seok serve as co-chairs of the forum, which includes around 10 lawmakers from the People Power Party and the Reform Party representing the Seoul metropolitan area.

Former Deputy Prime Minister for Economic Affairs Choi Kyung-hwan (center) speaks with Reform Party lawmaker Lee Jun-seok (left) and People Power Party lawmaker Cho Jung-hoon at the Metropolitan Housing Innovation Forum held at the National Assembly Members' Office Building on the 11th. Photo courtesy of Yonhap News.

The seminar, titled “I Should Have Borrowed Money to Buy a Home Back Then,” carried the subtitle “Why Are the Lee Jae-myung Administration’s Real Estate Policies Failing?” Choi delivered the keynote address, outlining problems with the current administration’s real estate policies and proposing alternatives.

As deputy prime minister under the Park Geun-hye administration, Choi led the economic policy known as “Choinomics.” His approach focused on easing real estate finance restrictions, including the loan-to-value (LTV) ratio and debt-to-income (DTI) ratio, and stimulating domestic demand and the real estate market through expansionary fiscal policy.

On November 11, Choi identified uniform lending restrictions, a slowdown in housing transactions, a decline in new housing supply, and rising jeonse and monthly rent prices as major problems with the current administration’s real estate policies. He argued that restrictions on lending and transactions were preventing existing homes from circulating in the market and making it difficult for people seeking homes to move.

As policy alternatives, he proposed abolishing the absolute cap on mortgage loans, limiting the operation of land transaction permit zones, and easing the tax burden on people who do not live in their homes and on owners of multiple homes. “Instead of imposing uniform loan limits based on housing prices, we should shift to regulations proportionate to borrowers’ ability to repay, using measures such as the loan-to-value (LTV) ratio and the debt service ratio (DSR),” Choi said.

He also proposed shifting housing supply policy from a focus on homes for sale to a focus on corporate-backed private rental housing. The aim, he said, is to expand quality long-term rental housing for young people and middle-income households and boost urban housing supply by reducing delays in approvals for reconstruction and redevelopment projects. “Preventing speculation is important, but the ultimate goal of policy must be housing stability for the people,” he said. “We should remember the saying, ‘The government cannot beat the market,’ rather than thinking, ‘The market cannot beat the government.’”

Cho, a co-chair of the forum, also criticized the government’s real estate policy direction. “If I had to sum up the Democratic Party’s real estate policy in one word, it would be ‘confused,’” he said, adding, “The government insists its regulations are justified, while the ruling party worries about their side effects. The ruling party shares responsibility for the government’s policies.”

Lee also said, “Isn’t it too harsh for President Lee Jae-myung to take away from the next generation, which is following behind on the ladder, what he himself has enjoyed?” He added, “Awareness in the National Assembly is growing that the government’s current housing policy is wrong and needs to change.”

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