Vice Premier Gu Yunzhe emphasized the need to manage excessive leverage in real estate.

Deputy Prime Minister and Minister of Finance and Economy Koo Yun-chul proposed on the 23rd in the National Assembly that excessive leverage in the real estate market needs to be managed. This acknowledges that real estate investment has indeed relied excessively on leverage over the long term and specifically points out the need to regulate such practices for properties not used for actual residence.

When explaining these views at the National Assembly’s Finance and Economy Planning Committee, Deputy Prime Minister Koo stated that to promote proper linkage between real estate and finance, plans are underway to collaborate with the Financial Services Commission. He emphasized, “Real estate no longer offers the huge expected returns it once did, which has become a common consensus,” and pointed out that real estate should be viewed simply as a place of residence. This move aims to shift people’s perspective from earning profits through real estate.

He also revealed during the meeting that opinions are being gathered on reforming property holding taxes. This suggests that the future direction of tax reform may remain flexible. Regarding the exchange rate, he said that while it is difficult to propose a specific reasonable level, the excessive depreciation of the currency driven by demand is not reasonable from an economic fundamentals perspective.

He mentioned that recognizing the importance of exchange rates in the operation of national pension assets is significantly beneficial in exchange rate stabilization policies, and he evaluated the new framework for the national pension as an effective policy.

This development indicates that the government may take more proactive measures to stabilize the real estate market. However, how market reactions and actual outcomes resulting from policy changes will affect long-term economic growth remains to be seen.