South Korea has implemented a "destructive housing policy" where the loan amount for high-priced properties is less than 10%. Should Taiwan follow suit?

The South Korean government has issued the strictest housing regulations in history, akin to a high-risk surgical operation, attempting to excise the tumor of speculation in one fell swoop. In contrast to Taiwan's gentle, traditional Chinese medicine approach to regulation, the two paths are completely different. Which one can truly solve the century-old problem of housing justice? (Background: The Executive Yuan has opened the faucet for housing loans! The new arrangements to remove Article 72-2 of the Banking Act have caused an uproar in the legal community: Does an executive order take precedence over the law?) (Background: Taiwan's housing market is experiencing “sky-high asking prices and flat transactions,” with price negotiations starting at a 15% cut. Will there be another drop next year?) Recently, the South Korean government dropped a bombshell: “The strictest housing regulations in history,” which have almost severed the possibility of ordinary people obtaining loans for home purchases, trying to cut out the tumor of housing prices that has entrenched itself in the heart of South Korean society. The government has stipulated that in core areas of the capital region, such as Seoul, the loan limit for luxury residences priced over 2.5 billion won (approximately 53.87 million TWD) has plummeted to just 200 million won (less than 4.5 million TWD). This means that a homebuyer harboring middle-class dreams would almost need to pay in full to unlock the door to their dream home. However, upon the release of this news, the market's reaction was not to cool down but rather to boil over in panic. In the last few hours before the new policies took effect, calls to real estate agencies in Seoul surged, with transaction prices hitting new highs, as people scrambled to seize the last opportunity to utilize existing loan limits as if fleeing from disaster. This scene absurdly yet vividly reveals a brutal reality: when the right to housing is thoroughly financialized, any effort to pull it back on track may trigger an even more violent storm. Meanwhile, a statement from the leader of the ruling party in South Korea, saying that “we should create a market where one can buy a house without going into debt,” has only added fuel to the fire, igniting public outrage. This kind of detached rhetoric has caused President Lee Jae-myung's approval ratings to plummet to new lows since taking office. However, when we pull back our perspective from the chaos in Seoul and compare it to Taiwan's relatively calm housing market policies, a deeper question emerges: why have the two societies chosen completely different philosophical approaches to the same suffocating high housing prices? The philosophical debate over housing market policies in South Korea's “shock therapy” is essentially a clearly targeted, high-risk surgical operation. The underlying policy philosophy is very clear: it identifies excessive speculative leverage as the disease of the market and thus chooses the most radical means—directly cutting off the arteries of funding, attempting to bleed speculators dry. By suddenly dropping the LTV (Loan-to-Value ratio) from 70% of the property price to 40%, and even limiting high-end residences to a loan amount of less than 10% of the total price, it essentially declares that in the eyes of the government, real estate in these areas is no longer a necessity for life, but a financial casino that must be tightly regulated. This approach is bold but also exposes its vulnerabilities. While surgery can quickly remove visible tumors, it cannot address the deeper causes of the cancer cells' spread and may even inadvertently harm healthy tissue during the removal process. The panic buying frenzy in the market is the most direct “post-operative complication.” Those who truly need to change homes, the young couples about to start families, have been pushed onto the operating table alongside speculators, becoming part of the “collateral damage.” This raises a critical question: has the South Korean government judged that the market has deteriorated to a point where conventional remedies are ineffective, and thus must resort to such drastic measures? This precisely reflects the deep structural issues in South Korea's housing market: the torrent of hot money under a chaebol-led economy and the uncontrollable level of household debt have rendered moderate policy tools ineffective. In contrast, Taiwan's housing strategy resembles a prolonged and cautious “traditional Chinese medicine treatment.” For instance, Taiwan's housing loan interest rates have long been maintained at around 2%, significantly lower than South Korea's 4% or more, which ensures the basic affordability for homeowners. Additionally, in tax design, homeowners are given a light tax rate of 1%, while those holding multiple properties that are not rented out are subjected to a heavy tax rate of up to 4.8%, attempting to “force” idle properties back into the rental market. The advantage of this strategy is stability and minimal side effects, avoiding the drastic market fluctuations seen in South Korea. However, the risks are also evident: if the remedy is too gentle, will it lead to a “drug resistance” in the disease (high housing prices), causing the problem to become chronic and ultimately unmanageable? Taiwan's housing prices have continued to rise steadily during this “treatment” process, seemingly validating this concern. Political gamble or political suicide? The power dynamics behind housing policies Housing policy has never been just economics; it is also political science. The South Korean government has chosen a “high-cost” policy tool that could shake the foundations of the nation, which is undoubtedly a massive political gamble. The sharp drop in President Lee Jae-myung's approval ratings starkly reveals the cost of this gamble. This raises a soul-searching question: in a society where real estate is deeply intertwined with the majority of households' assets, is any “truly effective” housing policy essentially an act of “political suicide”? So why is the South Korean government daring, or rather compelled, to take this gamble? The answer may lie behind the polling numbers. When the sense of despair among the youth, the social division caused by the inability to afford housing, and the collective anxiety about the future have accumulated to a point that threatens social stability, the pressure on the government goes beyond just the next election; it encompasses the risk of the collapse of the entire social contract. From this perspective, the radical housing policy may be a painful choice for policymakers between “chronic death” (being consumed by public discontent) and “acute shock” (policy pain). They are betting that short-term declines in approval ratings can yield long-term stability after the market resets, thereby regaining the trust of the new generation. In contrast, Taiwan's political reality presents a completely different picture. The political environment in Taiwan, whether blue or green, is heavily reliant on the support of the middle class and local factions, and a significant portion of these groups' assets are closely linked to real estate. Any policy that could lead to a drastic drop in housing prices would directly impact the core voter base of the ruling party. Therefore, Taiwan's policy choices always seek a delicate balance between “housing regulation” and “market stabilization.” This also explains why Taiwan's policy tools tend to stop short, focusing more on curbing transactions rather than attacking prices. Rather than a lack of resolve, it is a highly calculated political survival strategy. Regulating demand but unable to control human nature? Why do policies always get circumvented by the market? A common argument is: since moderate policies are ineffective, severe measures must be implemented. Supporters will point to the failures of former President Moon Jae-in's 27 attempts to regulate housing during his term, which only led to rising prices, to argue that only “nuclear-level” policies can be effective. However, South Korea's recent experiment seems to directly counter this linear thinking. The strictest regulations have led to the craziest market. On the eve of the new policies taking effect, an apartment in the Yangcheon District of Seoul, measuring nearly 18 pyeong, sold for a record high of 1.55 billion won, having increased by nearly 3 million TWD in just three months. This indicates that while policies attempt to rationally constrain the market, the market always responds with irrational “human nature.” When people anticipate that future home purchases will be even more difficult, their only reaction is to buy a home at any cost “immediately.” This reveals a fundamental blind spot in simply “suppressing demand.” Whether it is restricting loans (blocking the faucet) or increasing tax burdens (raising the cost of water), it merely contains the result of “demand” without addressing the root causes of why demand is so strong. These root causes are: first, the long-term insufficient supply of housing in core cities; second, the global monetary easing that forces hot money to seek stable investment targets, with real estate being the perfect vessel. South Korea's policies have almost completely ignored supply-side reforms, making their policy effects seem more like playing a game of “whack-a-mole,” suppressing one bubble but potentially creating another…