Seoul Mayor Oh Se-hoon criticized President Lee Jae-myung's mention of a "housing price crash" made the previous day, arguing that the administration still fails to grasp the reality of the housing market.

Mayor Oh released a statement on his social media today titled "I am dumbfounded by the President's perception of real estate reality," making these points.

Oh stated, "Yesterday, the President mentioned via social media that the government is preparing for potential housing price crashes caused by the rapid, massive supply of homes, the suppression of speculative demand, and surging loan delinquencies and foreclosures due to high interest rates." He criticized, "While forecasting a housing price crash is absurd in itself, citing 'rapid, massive supply,' 'suppression of speculative demand,' and 'surging loan delinquencies and foreclosures' as its basis clearly demonstrates that the President still fails to properly perceive the reality of the real estate market and people's livelihoods."

He emphasized, "It is a grave delusion to consider the government's supply announcements—which are heavy on targets but lacking in concrete schedules and execution plans—as 'rapid, massive supply.' Plans that make even the commencement of construction uncertain within his term can neither stabilize housing prices nor give the public confidence in supply."

He continued, "Could the President possibly view the recent phenomenon of some properties in the Gangnam area being listed at lower prices as a result of 'suppression of speculative demand'? Instead, housing prices are rising mainly in the outer areas of Seoul as a process of 'price adjustment' takes place. Evaluating this as a policy achievement means receiving flawed reports or turning a blind eye to reality."

Seoul Mayor Oh noted that President Lee mentioned "mortgage delinquencies and foreclosure properties are increasing significantly" as if it were a precursor to falling housing prices. Oh explained, "Housing prices do not automatically fall simply because foreclosure properties increase. We should look not only at the auction success rate but also at the winning bid-to-appraisal ratio, which reflects the actual winning bid price compared to the appraised value."

He added, "In July of this year, the winning bid-to-appraisal ratio for apartments in Seoul stood at 101.0%, staying above 100% for four consecutive months. This means that despite the increase in foreclosure properties, homes in Seoul are being auctioned off at prices higher than their appraised values. The auction indicators that the President told people to pay attention to are not signs of falling housing prices, but rather evidence of Seoul's strong latent demand and severe supply shortage."

Mayor Oh stated, "Above all, the President's perception regarding loan delinquencies and foreclosures is deeply concerning. Not all owners of homes put up for auction are speculators who recklessly took out loans to buy housing. Among them are self-employed individuals who could no longer withstand sluggish domestic demand and high interest rates, as well as ordinary citizens at risk of losing their livelihoods and homes after mortgaging their only houses to secure business funds."

He pointed out, "Instead of welcoming the influx of foreclosure properties as a signal of crashing housing prices, the top state official should feel a heavy sense of responsibility in the face of the suffering of citizens who are forced to put their homes up for auction."

Mayor Oh stated, "Real estate issues cannot be resolved by issuing threats to the public. The market does not move according to the government's wishes simply by repeating slogans like 'smashing speculation.' A market complexly intertwined with supply and demand, interest rates and finance, and sales and leases must be handled with accurate data and a cold realization of reality."

He urged, "Please stop trying to evade crises by fronting temporary stopgaps and fear. Even now, completely review the misguided real estate policy stance and choose the straightforward approach of substantially supplying housing where the public wants it."

(File Photo: Yonhap News)