Lee vows imminent real estate supply package, says price pressure 'fairly well contained'

President Lee Jae Myung said Monday that the government has done a reasonable job holding back upward pressure on real estate prices and pledged to announce a supply expansion package soon.

"Supply dropped sharply over the three years from 2022 to 2024," Lee said at a press conference marking his first anniversary in office, held at Cheong Wa Dae's Yeongbingwan on Monday morning. "Whether it's new construction, land development, reconstruction or redevelopment, moving quickly is what matters." He said breaking free from what he called a "real estate speculation republic" was essential to the country's future.

Lee said the government is pulling together a comprehensive set of measures covering taxation, finance, regulation and supply, and intends to release them as a package. "However, tax issues will probably need to be handled together in July when we draw up next year's budget plan," he added.

On the surge in jeonse — long-term deposit-based rental — prices in the Greater Seoul area, Lee pushed back against the argument that a shrinking jeonse supply had caused a real estate price spike, calling it "a logic invented by those who want that outcome." He said the situation was part of a normalization process and that the data did not show a dramatic surge.

Lee also said Korea's property holding taxes are generally low, leaving little financial burden on those who own multiple homes, and that the fundamental fix was to lower expected returns on real estate investment.

He said curbing speculative demand must go hand in hand with expanding supply. Building new towns by encroaching on greenbelt land is the easiest option, he acknowledged, "but the problem is that it hollows out the regions." He said releasing homes currently held for investment or speculative purposes would unlock enormous additional supply.

"We need to change the mindset that buying land through speculation pays off," Lee said. "This has to be resolved by whatever means necessary, and it can be resolved if there is the will to do so."

Lee said real estate speculation is distorting the broader economic structure. "People borrow from banks to buy several homes and end up earning more than they would from working," he said. "That erodes the will to work, and all manner of illegal and irregular practices run rampant in the process." He added that locking up the nation's asset capacity in real estate was keeping it out of productive use, and said the undervaluation of share prices was bound up with the same problem.

Asked whether real estate sentiment had played a role in the June 3 local elections — including the Seoul mayoral race — Lee said, "When you lose an election, there are ten thousand reasons why; when you win by even one vote, there are ten thousand reasons for that too." He said real estate's influence on the vote "was a constant."

Even so, Lee said he believed the government had done a reasonable job containing upward price pressure. He noted that recent polling showed 50 percent of respondents rated the administration's real estate policy positively.

At Monday's event, Lee took questions directly from the press corps across three broad areas: the economy and livelihoods, politics, diplomacy and security, and society and culture. At his New Year's press conference in January, he fielded questions for roughly two hours and 53 minutes, well beyond the originally scheduled time.

Lee was also scheduled to hold a meeting Monday afternoon at Cheong Wa Dae with the heads of the country's four other constitutional institutions. National Assembly Speaker Jo Jeong-sik, Prime Minister Kim Min-seok, Constitutional Court Chief Justice Kim Sang-hwan and Supreme Court Chief Justice Jo Hee-de were set to attend. The National Election Commission chief, who would normally be part of such a gathering of the five institutional heads, was excluded.

Some in political circles viewed the meeting primarily as a get-acquainted session following Speaker Jo's election, though others interpreted it as an occasion to discuss the need for oversight and monitoring mechanisms for the election commission.

On Sunday, Lee posted on X, formerly Twitter, expressing "deep regret, both as a citizen and as the president responsible for the government," over a ballot shortage that occurred during the local elections. "The right to political participation is a constitutional right that must not be restricted or infringed upon for any reason," he wrote, calling the incident "a serious matter that undermines the very foundation of popular sovereignty."