Some 2.28 million people owned two or more homes last year, up by 160,000 since President Moon Jae-in took office in 2017 despite a flurry of policies his government put in place to tame the housing market. The proportion of multiple home owners out of total households in the country rose from 15.5 to 15.9 percent over the last three years. The government has demonized multiple-home owners as real estate speculators and came out with over 20 different sets of regulations aiming to tame them, but the figures have probably risen again this year. In other words, more people ended up buying homes because they feared that prices would rise even further if they did not do it now.

The gap in home prices has also widened further. Last year, the average price of homes in the top 10 percent range rose 13 percent to W1.13 billion (US$1=W1,106). However, prices of homes in the bottom 10 percent range rose just four percent to W27 million. That resulted in a difference of more than W1 billion for the first time ever. This shows that the government, which claims to have the back of low-income earners, has actually ended up making the rich richer.

A set of regulations in late July designed to bolster the rights of tenants ended up exacerbating the crisis, resulting in rental prices going through the roof. The index gauging the availability of rented homes reached 191.1 in October, approaching the upper limit of 200 and the highest level in 19 years. That means there is a dire shortage of rentals not only in Seoul but in major cities across the country. That has of course prompted more and more people to borrow money and buy their own homes instead, causing prices to skyrocket particularly in the satellite towns where ordinary people can still afford to buy.

Moon has claimed he is “confident” that he can tame real estate prices, but his track record inspires anything but confidence because he has made things worse at every turn. A badly planned real estate policy that fails to recognize market principles has led to disaster. Yet the government is still refusing to accept responsibility, variously blaming the previous administration, or low interest rates that make borrowing easier for would-be buyers, or anything but itself. Such a pig-headed attitude makes it nearly impossible to find a solution.

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