South Korean President Expresses Concern Over Real Estate Bubble Risk

SEOUL, July 23 (Yonhap) -- President Lee Jae Myung expressed concern Thursday over South Korea's exceptionally massive investment in real estate, citing worries that the country may be heading toward the kind of a market bubble and subsequent collapse experienced by Japan.

The president made the remarks at a public discussion on real estate policy as the government prepares to revise real estate taxes to rein in runaway home prices.

The discussion, which was televised live, brought together around 140 participants, including YouTubers, internet users, real estate agents and representatives from the financial, media and academic sectors, along with Prime Minister Han Seong-sook and other Cabinet members.

Lee referred to Japan's real estate market collapse in the 1990s, saying the market "burst like a balloon" after rising demand for real estate continued to drive up prices. "It led to talks of Japan's 'lost 20 years' or 'lost 30 years,'" he said.

"In fact, quite a few people are worried that we are heading toward that kind of peak. And many people share the view that we need to take countermeasures at this point," the president said.

Lee also voiced concern over South Korea's exceptionally high level of investment in real estate.

"Looking at objective figures, real estate asset prices and the share (of investment in real estate) may be among the highest in the world," he added.

The president described stabilizing the real estate market as "one of South Korea's biggest challenges," stressing the importance of reaching a social consensus on ways to rein in the market.

During the meeting, experts on the housing supply, financing and taxation gave presentations before participants joined a discussion on real estate policy.

The discussion comes as the government reportedly plans to announce a revision to property holding taxes as early as late this month in a bid to rein in runaway home prices.

One of the key issues on real estate policy remains setting the home price threshold at which higher property holding taxes should apply, as the government is expected to increase the tax burden on owners of high-value homes as a way to cool housing demand.

The outcome of the discussion is expected to be reflected in the government's expected tax revision.