A civic group has criticized the Lee Jae-myung administration's August 3 tax reform and August 13 real estate supply measures, warning that they will perpetuate the "one high-value home" phenomenon and drive up prices of apartments in Seoul valued under 2 billion won.

The Citizens' Coalition for Economic Justice (CCEJ) held a press conference titled "Denouncing the Lee Jae-myung Administration's Real Estate Policies" this morning at the CCEJ auditorium in Jongno-gu, Seoul, calling for a complete overhaul of real estate policies.

On the 13th, the government announced the August 13 supply measures, which include the prompt supply of over 230,000 housing units in the capital area—such as 10,000 units in new housing sites—along with financial support for young adults, actual homebuyers, and project financing (PF).

CCEJ pointed out that these measures lack provisions for stabilizing housing prices, eradicating speculation, and securing housing stability for homeless low-income families.

The group argued that the public housing policy is similar to or risks overlapping with existing policies, and that the 20-year publicly supported private rental system allows sales after the mandatory rental period expires, making stable operation difficult.

They also argued that policies targeting non-apartment housing, such as easing loan regulations when purchasing newly built non-apartment homes, are meaningless given that non-apartment auction cases surged more than fivefold from 4,305 in 2021 to 22,655 last year.

CCEJ evaluated that the public housing policy is merely a message telling citizens to buy homes with debt because apartment prices will continue to rise, much like past public sales, while the private rental system is a policy to revitalize corporate rental businesses.

Criticizing the August 3 tax reform as well, they stated that it "cannot alleviate the 'one high-value home' phenomenon" and that "the government lacks the commitment to real estate reform."

According to Ministry of Land, Infrastructure and Transport apartment disclosure price data from last year, homes exceeding 900 million won account for only 3.6% (560,000 households), and homes exceeding 1.4 billion won account for just 1.6%.

Under these circumstances, reorganizing the comprehensive real estate tax target for housing to exceed 1.4 billion won for owner-occupants and 900 million won for non-owner-occupants will trigger a balloon effect, leading to rising prices for homes with public disclosure prices under 1.4 billion won (approximately under 2 billion won in market value).

CCEJ proposed the continuous supply of land-lease homes as an alternative.

Land-lease housing refers to a model where the public owns the land while only the housing structures are sold to citizens.

CCEJ argued that, unlike mortgage loans where interest income goes to banks, land-lease housing converts returns into public revenue through land lease fees, which aligns with the government's intent to decouple real estate from finance.

(Photo: Yonhap News)