[Edaily Kim Sang-yoon Reporter Hwang Byung-seo] President Lee Jae-myung stated on the 3rd, “Actual transaction prices in major regions are also continuing to fall—and they are falling at an astonishing rate.” He went on to reveal a plan for the government to purchase large quantities of homes for use as public rental housing in the event of a sharp drop in housing prices, expressing his determination to shatter the “myth of real estate’s invincibility.” This is interpreted as a warning against panic buying driven by the expectation that housing prices will eventually rise, while also urging preparedness for the shock of falling prices.

During the Cabinet meeting that day, President Lee stated, “Isn’t the number of apartments listed for sale in the Seoul area increasing rapidly right now?” and added, “Transaction volumes are declining very rapidly.” While mentioning the decline in actual transaction prices in major areas, he also noted, “Of course, there are also areas where this is not the case.”

He said, “There are various opinions circulating regarding the outlook for the real estate market, particularly housing prices in the Seoul metropolitan area,” noting, “Some are even beginning to worry about a crash.” He went on to emphasize, “It is clear that housing prices in South Korea are abnormally high, and that for the sake of the nation’s future, we must shed the stigma of being a ‘real estate speculation republic.’”

President Lee later posted on X (formerly Twitter), stating, “For the sake of the people and the nation, the myth of real estate’s invincibility must now be shattered—and it must be shattered.” He added, “Contingency plans are already being devised, including the government’s large-scale purchase of properties for use as public rental housing in the event of a significant drop in housing prices.” He also said, “While some argue that the government cannot withstand a decline in housing prices, escaping the ruinous ‘real estate speculation republic’ is more important than the fate of this administration.” This remark is interpreted as targeting the expectation that the government will ultimately step in to stimulate the economy if falling housing prices destabilize the economy and financial markets.

Chae Sang-wook, CEO of Connected Ground and a former construction and real estate analyst, pointed out that this year’s amendments to the enforcement decree following the “August 3 Tax Reform Plan” set a transfer deadline—in principle, until the end of 2027—for the special exemption from the surtax on capital gains when deregistering purchase-to-rent apartments in regulated areas. He analyzed that this could lead to increased downward pressure on prices even outside the Gangnam area. He said, “These types of homes aren’t limited to Gangnam, so the environment will be significantly different from this year.”