Oh Se-hoon, the Mayor of Seoul, stated that the key issues for the upcoming national real estate forum should focus on expanding supply and stabilizing the rental market, rather than on taxes.
In a Facebook post on July 12, Mayor Oh welcomed the government's initiative to hold a public forum to hear citizens' voices on real estate issues. However, he expressed concern that the discussion might again focus on 'who will bear more tax burdens,' as suggested by the President on social media.
He emphasized that the forum should concentrate on resolving the housing problems that citizens are currently facing.
Mayor Oh characterized the current housing market in Seoul and the surrounding metropolitan area as experiencing a 'triple rise,' where sales prices, jeonse (long-term lease), and monthly rents are all increasing simultaneously.
In the Seoul apartment market, rising sales prices have led to a shortage of jeonse properties, causing jeonse prices to rise as well. Additionally, tenants struggling with jeonse costs are shifting to the monthly rental market, further driving up monthly rents. Young people, newlyweds, and early-career individuals are finding it increasingly difficult to secure jeonse, leading to a significant increase in housing cost burdens.
To address these realities, Mayor Oh proposed that the forum's primary agenda should include: 1) rapid supply expansion, 2) revitalization of redevelopment and reconstruction projects, and 3) normalization of the rental market.
He stated, 'What citizens want is not just numerical supply plans but effective policies that can assure the market of expanded supply.' He added that trust in supply is essential for market stability.
Furthermore, he noted that 'redevelopment and reconstruction are the most reliable supply measures,' warning that delays in these projects could hinder new housing supply and exacerbate price increases as demand concentrates in the existing housing market.
Mayor Oh stressed that the most urgent issue for young people, newlyweds, and low-income families is finding stable housing. He insisted that how to resolve the decrease in jeonse listings and the increase in monthly rent burdens must also be a core agenda item.
'What the public is suffering from is the simultaneous rise in housing prices and rental costs,' he said. 'If discussions focus on other topics while ignoring the public's pain, it will be hard to consider it a genuine forum for listening to citizens.'
This statement comes as the government is promoting a public forum to discuss overall real estate policies, reiterating Seoul's consistent stance on prioritizing supply expansion for market stability.
There has been ongoing debate in the real estate market about the inadequacy of tax-focused policies to stabilize the market, with calls for simultaneous supply expansion. Generally, when transaction taxes or holding taxes increase, property owners may be incentivized to pass these costs onto sales prices or rents. If transactions decline, the number of properties available on the market may decrease, weakening the price adjustment mechanism. However, the effects of such policies can vary based on market conditions and tax design, and experts have differing views on the impact of tax policies.
As a result, whether the upcoming national forum will emphasize discussions on tax burdens or broadly address market structural improvements, including supply expansion and rental stability, is expected to be a significant turning point for future real estate policies.
* This article has been translated by AI.
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