Seoul's apartment prices have risen for a record 86 consecutive weeks, prompting scrutiny of the government's housing supply effectiveness during a national audit by the National Assembly's Land, Infrastructure and Transport Committee. Lawmakers from both parties criticized the simultaneous increases in sales, jeonse (long-term lease), and monthly rent, while Minister of Land, Infrastructure and Transport Hong Ji-sun identified a decline in construction over the past three years as a major cause of the supply shortage.
Minister Hong announced plans to establish a 'supply situation board' to publicly disclose the progress of housing supply projects and strengthen consultations with the Seoul city government. Regarding housing prices, he noted that the Gangnam area and Yongsan have already begun to decline, predicting that the rate of increase in Seoul's housing prices will slow as the year progresses.
During the audit on October 7, Kim Jeong-jae, a lawmaker from the ruling People Power Party, pointed out that the housing market is experiencing a 'triple increase' in sales, monthly rent, and jeonse, describing it as a disaster-level situation. He argued that the decrease in jeonse availability due to various occupancy regulations has led tenants to engage in 'survival purchases' of lower-priced apartments in the outskirts, contributing to rising home prices.
In response, Minister Hong acknowledged that multiple factors have contributed to the recent rise in housing prices, but emphasized that supply shortage is the primary issue. He stated, 'Over the past three years, housing supply has not kept pace with demand,' explaining that the decline in construction and delays in occupancy are currently impacting the market.
According to the Korea Real Estate Agency, Seoul's apartment prices have set a new record for the longest consecutive increase since the first week of February last year.
However, Minister Hong expressed optimism about future market stability. He noted, 'The Gangnam area and Yongsan have already seen negative price changes, and other regions are also experiencing reduced price increases,' predicting that the rate of increase in housing prices will decrease by the end of the year.
He also left open the possibility of extending the land transaction permit zones in Seoul and Gyeonggi Province, which are set to expire at the end of the year. Minister Hong evaluated the land transaction permit system as effective for market stabilization but stated that decisions on extensions or expansions would be made based on a comprehensive review of market conditions, including subscription competition rates.
'Show Progress, Not Just Plans'... Push for Supply Situation Board
During the audit, there were also calls for the government to manage actual construction and occupancy timelines rather than just announced supply figures. Minister Hong stated, 'We are preparing to promote the housing supply situation board,' pledging to transparently disclose the current progress from construction to occupancy to the public.
The aim is to align the government's supply performance criteria with actual construction and occupancy rather than just permit figures. He acknowledged, 'It is true that housing construction has significantly decreased over the past three years and that occupancy has been delayed,' asserting that it is the government's responsibility to expedite construction and occupancy volumes as much as possible.
To accelerate the supply of public land, the government is also considering measures to shorten the land compensation period. This includes providing incentives to landowners who agree to negotiated compensation, thereby reducing the time taken for expropriation and appeals.
Regarding private supply, Minister Hong stated that the government would pursue regulatory improvements and support for project financing. He emphasized that while actively promoting public supply, the government is also thoroughly reviewing ways to expand private supply.
The discord between the government and the Seoul city government over supply policies was also highlighted. In response to criticisms that discussions to expedite urban public complex projects have not been adequately conducted, Minister Hong explained that he has instructed practical consultations with the Seoul city government.
He stated, 'I share the view with Seoul Mayor Oh Se-hoon that the housing supply policies pursued by the Seoul city government and the national government should not differ significantly,' and assured that issues causing delays due to insufficient consultations would be addressed.
Minister Hong also opened the possibility of utilizing some of the land returned from Yongsan for housing supply.
'Decrease in Jeonse is a Mega Trend'... Reassessing Non-Apartment Policies
Changes in the rental market were also a major topic. Minister Hong diagnosed the decrease in the proportion of jeonse as a long-term 'mega trend,' citing the increase in single-person households and the impact of jeonse fraud.
However, he distanced himself from criticisms that government policies are encouraging the disappearance of jeonse. He explained that the government is utilizing systems such as the Housing and Urban Guarantee Corporation's rental security trust to enhance the safety of tenants' deposits.
Concerns were also raised regarding the government's non-apartment supply policies. Democratic Party lawmaker Bae Seung-chan pointed out that young people and newlyweds actually prefer apartments, and criticized the government's approach of supplying non-apartment rental housing as mismatched with demand.
The Ministry of Land, Infrastructure and Transport plans to reassess the effectiveness of its policies. It will conduct research to track whether young people and newlyweds living in non-apartment housing eventually move to apartments and how long that transition takes.
Specific criteria for the 190,000 units of universal public rental housing will also be disclosed by the end of the year. Minister Hong responded to criticisms that only the supply scale has been presented without details on income criteria, target demographics, and rental rates, stating that concrete criteria will be established by the end of the year.
Meanwhile, during the audit, despite differences in perspectives between the ruling and opposition parties regarding government housing policies, there was a shared focus on the need to enhance supply effectiveness. The government also indicated a direction to not only propose new supply targets but to directly manage construction and occupancy timelines.
* This article has been translated by AI.
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