Yoo Seong-min says president's housing crash talk sounds 'like a spell, not science'

Former People Power Party lawmaker Yoo Seong-min said President Lee Jae Myung's social media post warning of a housing price collapse sounded "not like science, but like some kind of spell."

Yoo made the remarks Sunday on his personal Facebook page, saying the president appeared to be citing rising mortgage delinquencies, an increase in court-ordered auctions and an expected interest rate of 3.5 percent in the first quarter of next year as grounds for a housing price collapse.

"Mortgage lending is already under extremely tight regulation, so I'm not sure whether home prices would actually collapse just because interest rates rise a little," Yoo wrote. He added that while tax burdens might push some owners to list properties at lower asking prices in a handful of ultra-high-end areas, it was doubtful whether that would translate into a broad collapse in home prices.

Yoo said that while stable housing prices and affordable jeonse and monthly rent were what many people wanted, a price collapse — as with any price — was only possible when demand suddenly contracted sharply or supply surged all at once. "Housing supply in the Greater Seoul area has no prospect of increasing for at least the next few years, and the supply of jeonse and monthly rentals is actually shrinking," he said. "For home prices and rents to collapse, demand for both purchases and rentals would have to contract rapidly — and I wonder whether that will really happen."

He also said rising delinquency rates and more court-ordered auctions were not necessarily a sign of an impending housing price collapse, but could instead be evidence that many households had gone under due to economic hardship.

Yoo then criticized the president directly. "The public is dumbfounded that someone holding the weighty office of president would suddenly start talking about a housing price collapse," he wrote. "It seems he has been watching far too many fringe YouTube channels that have done nothing but shout about a housing crash and mislead the public."

Earlier the same day, President Lee posted on X, formerly Twitter, saying his administration would "use every means necessary to stamp out the ruinous real estate speculation that is destroying the country." He said the government would mobilize all national resources to expand housing supply and accelerate delivery, in addition to financial and tax reforms.

Lee outlined several real estate-related conditions and projections — including plans for rapid expansion of housing supply, an expected Bank of Korea interest rate of 3.5 percent in the first quarter of next year, and rising mortgage delinquencies and auction listings — before explaining that he had directed the government to prepare a system to purchase large quantities of homes below a certain standard for public housing stock, as a contingency against a sharp housing price collapse driven by early mass supply, suppressed speculative demand, and a surge in loan delinquencies and auctions caused by high interest rates.