[비즈한국] The President has taken direct action. Just four days after holding a market inspection meeting on August 3, President Lee Jae-myung convened a second real estate policy inspection meeting on the 7th to focus on plans for expanding housing supply in the Seoul metropolitan area. Pointing to the cumulative supply stagnation since 2022, he reportedly urged the mobilization of all administrative, financial, fiscal, and deregulation tools to accelerate the timing of supply. It is even said that when Deputy Prime Minister Koo Yoon-cheol reported that "the Taereung Golf Course will break ground in 2029, one year ahead of schedule," the President instructed him to pull it forward further, saying "2029 is also too late."
Prioritizing speed is correct. The problem is that prioritizing speed does not automatically create apartments where there were none.
The metropolitan area supply plan, expected to be announced as early as this month, is reportedly focused on selecting only the volume that can begin construction between 2027 and 2029. Borrowing the words of a senior government official, they intend to release "only the certain volume that has completed consultations with local governments, excluding everything that is late or ambiguous." There is speculation that the total may well fall short of the initially expected 50,000 units. Idle military land and state-owned land within Seoul are being mentioned as the primary sites.
At this point, the market is feeling two conflicting emotions simultaneously. One is relief: "They are finally announcing only what is actually achievable." The other is cynicism: "So, what impact does this have on my home price right now?" Regrettably, the latter is the much more accurate reaction.
Breaking ground is not supply
The supply that the market experiences is not the announcement. It is not even the start of construction. It is move-in.
If construction begins in 2027, the earliest move-in date is 2030. If it starts in 2029, that pushes it to 2032, or as late as 2033. The period we are worried about right now is the gap in move-in volume between 2026 and 2028. The volume that should have filled this gap should have already broken ground between 2023 and 2025, and everyone knows what the licensing and construction performance for those three years was like. The measures to be announced this time will not bridge that hole. It is a policy with a time lag that cannot be filled from the start.
It is as if we are calling a fire truck that will arrive in five years to put out a fire that is burning right now.
Of course, a fire truck five years from now is also necessary. The problem is that the government is presenting that future fire truck as if it were a firefighting measure for today, and the market does not believe it. If this gap between announcement and perception is repeated, all that remains is distrust in policy.
It is checking inventory, not new land
Look at the names of the sites being mentioned this time: Yongsan Camp Kim, Taereung CC, Gwacheon Horse Racing Track. They are not unfamiliar. These are names that appeared in 2018 and also in the August 4th measures of 2020. A plan to supply 10,000 units at Taereung CC was already announced in 2020, but it drifted for six years due to resident opposition, traffic congestion, and issues regarding the preservation of the nearby Taegangneung World Heritage site. It is now being pursued again, reduced to 6,800 units.
Market participants have already entered these locations into their Excel sheets. Calculating the re-announcement of land from six years ago as "new supply" does not hold up. Reheated news is inventory verification, not supply.
The principle of "announcing only certain volumes" is absolutely correct. However, the more strictly that principle is applied, the more the announced volume shrinks, leaving only state-owned land that the market already knows about. It is a paradox where conservative calculations intended to gain trust end up erasing the impact.
An arithmetically impossible schedule
Take Gwacheon, for example. The government plans to package approximately 1.43 million square meters, including the 1.15 million-square-meter racecourse and the 0.28 million-square-meter Army Security Command, into a single public housing district to build 9,800 units and the Gwacheon AI Techno Valley, with construction starting in 2030.
However, according to the self-implementation plan submitted by the Korea Racing Authority (KRA) last month, it was found that moving the horse racing park requires at least 16 years and 9 months, with securing a new site alone taking at least 6 years and 6 months. The time remaining until the 2030 start of construction is just over 4 years.
Bridging the gap between 16 years and 9 months and 4 years is not policy; it is magic. Although the Ministry of Agriculture, Food and Rural Affairs stated that it would "proceed to ensure there are no setbacks in the original supply schedule," a horse racing track is not just a racetrack. Stables, animal hospitals, and spectator/operation facilities are intertwined, meaning securing a substitute site and building new facilities must come first. The city of Gwacheon is expressing concern over the additional supply itself, citing the burden on transportation, water and sewage, and educational facilities.
The same applies to Yongsan. The plan is to increase the housing supply in the international business district from 6,000 to 10,000 units, but consultation with the Seoul Metropolitan Government, which oversees urban development and infrastructure planning, is essential. If the number of households increases, transportation and schools must also increase. This is the backdrop for the emergency meeting held by Policy Chief Kim Yong-beom and Mayor Oh Se-hoon on the 5th, and Mayor Oh made it clear immediately after the meeting that "prior consultation must come first." If consultations are delayed, the 2028 start of construction will collapse.
Taereung still faces hurdles that cannot be controlled by real estate policy logic: deliberation by the Cultural Heritage Committee and an impact assessment for the World Heritage site.
In other words, the Ministry of Land, Infrastructure and Transport does not hold the decision-making power for any of the three core project sites of this measure. The Seoul Metropolitan Government, the Cultural Heritage Administration, the KRA, the Ministry of National Defense, and the city of Gwacheon all move according to their own clocks. There has never been a time when the government was the sole subject of a supply measure.
Real supply lies in redevelopment projects
The voices heard at the "Citizens' Debate for Real Estate Normalization" held by the Seoul Metropolitan Government on the 7th were accurate. Since there are limits to public housing supply, government-level deregulation must be implemented to increase private redevelopment and reconstruction projects. The Seoul Metropolitan Government announced it would push to begin construction on 310,000 units by 2031 by shortening licensing periods through methods like the Rapid Integrated Planning.
310,000 units versus 32,000 units. If you compare the numbers, the answer is already clear. Large-scale new residential land is no longer emerging in Seoul. The only way left is to tear down old houses and build taller ones.
Yet the government is spending its administrative energy searching for new land, while hundreds of project sites where associations have already been established and blueprints drawn up are stalled in the face of the Reconstruction Excess Profit Recovery System, the price cap system, construction cost disputes, and the PF crisis. It is faster to restart a stopped clock than to find land that doesn't exist.
So, to be successful
Having written at length about why I don't feel optimistic, I will be clear about the prescriptions.
First, announce dates, not household numbers. Until now, supply measures have always been remembered by "how many tens of thousands of households." But what the market wants to know is the schedule, not just the total. When is the district designation, when is the compensation, when is the ground-breaking, when is the move-in? And who takes responsibility if that schedule slips? Household numbers are not a promise; dates are a promise.
Second, announce only after solving prerequisites. Announce Gwacheon only after confirming the KRA's substitute site. Announce Taereung only after passing the World Heritage impact assessment. If the order is reversed, the announcement becomes a bounced check, and if bounced checks accumulate, the market will not even factor the next measure into its calculations. It means the principle of "releasing only certain volumes" must be truly upheld.
Third, clear the bottlenecks for private redevelopment projects. Shortening licensing periods, normalizing the Reconstruction Excess Profit Recovery System, realizing the price cap system, and creating an arbitration body for construction cost disputes. Even if just one of these four is properly resolved, a volume larger than these 60,000 units will begin construction within three years. It is always faster and cheaper to let those who intend to build do so, rather than having the government build directly.
Fourth, ensure consistency between demand and supply policies. If the government tries to increase supply while simultaneously blocking initial purchase demand with loan restrictions, the start of construction itself will be delayed due to concerns over unsold units. As the tax reform announced on August 3 moves toward asset-value-centered taxation, the pressure for a "single solid property" has only increased. If you open the door to supply but lock the door to demand, what gets stuck in between is the business viability of construction companies and associations. Giving land doesn't mean apartments will be built. They only get built if someone who can build them is allowed to do so.
In the end, the number of cranes
The fact that the President held two consecutive inspection meetings is positive. Because being overseen by the top decision-maker means there is now the power to mediate disagreements between ministries. The point where the President reportedly said, "Since there is no way to do it like a lone wolf, try to consult well," is also welcome. That consultation is exactly what is needed right now.
However, the market does not count the number of meetings. The success of supply measures is determined not by the thickness of the announcement document, but by the number of cranes standing on that land.
Whether this announcement ends as just another "volume announcement" or becomes the starting point for "timely construction" will be decided not on the day of the announcement, but in the six months following it. You can tell by looking at when the district designation is notified, when the KRA substitute site is confirmed, and when the consultative body with the Seoul Metropolitan Government begins to operate.
Until then, the market will not trust the announcements; it will trust the shovels.