"The progressive regime has taken measures to curb demand, such as imposing taxes and restricting ownership, but the market has overcome this. I will not use taxes to set housing prices anymore."

Just over a year ago, when he was a presidential candidate, President Lee Jae Myung stressed that he would take a different path from the previous administration. The core axis of the pledge at the time was to lift regulations on reconstruction and redevelopment and increase housing supply by using idle land. However, the state policy stance confirmed at the 'Real Estate Policy Public Debate' presided over by President Lee on the 23rd was far from the promise. President Lee said, "The most urgent thing right now is the tax system," adding, "We need to raise the holding tax at least three times to match the level of advanced countries." The market was asking where, how long, and how long it would supply housing and how it would open the breath of loans for end users, but the first card the government took out was a "real estate tax increase."

Future policies are expected to weigh on increasing the tax burden on ultra-high-priced houses, including so-called "one smart house," and one non-residential house. However, it is questionable whether the increase in the holding tax on ultra-high-priced houses will be an effective card to resolve the current overheating of housing prices and the severe shortage of monthly rent. If the elderly with low cash income and others release their homes without enduring the tax burden, the ultra-high-priced housing market of 4 billion won to 5 billion won could temporarily begin to breathe.

However, it is not ultra-high-priced houses that are leading the rise in housing prices in Seoul, but apartments in the range of 1 billion won to 1.5 billion won, where real demand from the middle class is concentrated. When the government differentially limited the mortgage loan limit to less than 1.5 billion won (600 million won), 1.5 billion to 2.5 billion won (400 million won), and more than 2.5 billion won (200 million won), there was a strong "balloon effect" in which buying was concentrated on houses with less than 1.5 billion won with large capacity for loans.

With the recent tightening of loan regulations, the "national policy proposal" received ahead of the debate has been flooded with calls for deregulation, but no improvement measures have been made for uniform loan regulations.

The bigger problem is the government's skepticism about "supply," a key key to market normalization. President Lee said, "It is not appropriate where and how to increase it." Regarding the lifting of the green belt, he expressed opposition to residents and environmental damage, and negatively evaluated the effect of supply on reconstruction and redevelopment.

However, the solution to breaking the high price of housing in previous governments was "overwhelming supply" without exception. Bogeumjari houses, which the Lee Myung Bak government pushed for by releasing green belts such as Segok in Gangnam and Woo-myeon in Seocho in the past, have had the effect of stabilizing housing prices in the metropolitan area. The volume itself was important, but the signal that "the government builds and supplies affordable houses anywhere if it decides" calmed the market's anxiety.

Everyone knows that it is not easy to secure new housing sites in downtown Seoul. If so, it is common sense to speed up the project by lifting existing regulations on urban reconstruction and redevelopment. As sales from the existing housing market are also supplies, transaction taxes such as capital gains tax and acquisition tax should be lowered to induce distribution volume. However, the government is considering reducing the special deduction for long-term ownership of transfer tax for single homeowners, and is also trying to raise the transaction tax. As experienced during the Moon Jae In government, an increase in transaction costs will only lead to lock-up of sales and contraction of transactions.

The approach to suppressing demand only with taxes and loans can only increase impatience that "it will go up if it's now or higher" rather than quelling market instability. President Lee said he would "take a helicopter around the Seoul metropolitan area" to find the land. What is as important as that will is the supply blueprint in hand. What the market wants is the belief that there will be enough housing in the future and that it will be able to buy and sell houses whenever it wants. House prices are not counted by taxes alone. The power to stabilize the market eventually comes from supply.

[Shim Yunhee, Editorial Writer]