Lee Sung-hoon, president of the Korea Land & Housing Corporation (LH), said home prices are highly likely to fall sharply, citing expanded housing supply and rising interest rates. The remarks came as he explained his recent comments on mortgage rules, and he also said he would resign if efforts to stabilize prices fail.
"We are supplying aggressively right now, and interest rates are rising, so there is a strong possibility that home prices will not keep climbing and will instead fall considerably," Lee said on the 12th at a parliamentary audit of LH held by the National Assembly's Land, Infrastructure and Transport Committee. "If prices kept rising, people would have to compete to buy a home, but once the market stabilizes, you will not lose out by not buying right away." Asked whether he should take responsibility and step down if prices are not brought under control, Lee replied, "I will do so."
On his remarks at a press briefing on the 30th of last month, where he said there was a need to discuss tightening mortgage rules beyond current levels, Lee said, "That is not the government's position but my own view."
Lee's comments drew criticism even from the ruling party. Rep. Chung Il-young of the Democratic Party of Korea said, "Young adults and owner-occupier buyers have a lot of complaints about this, so the priority should be delivering supply quickly. Saying demand must be suppressed is not something the LH president should be saying." Rep. Kim Mi-ae of the People Power Party said, "When someone of the LH president's standing makes such a statement, wouldn't the public take it as a message that lending on apartments priced below 1.5 billion won will be tightened further?"
Lee also said LH's rapidly growing debt stems from the process of expanding housing supply, and that the corporation is requesting fiscal support at the government level. Responding to concerns that the debt burden is swelling significantly as rental housing supply increases under the Ministry of Land, Infrastructure and Transport's housing stability plan, he drew a line, saying "a substantial portion is integrated public rental housing" — a category combining several existing rental housing types. He also strongly stressed the need to add staff to LH's workforce.
In his briefing to lawmakers that day, Lee said LH would break ground on 96,000 homes nationwide, including 86,000 in the greater Seoul area. The plan calls for expanding direct development of public land and running permitting, compensation and demolition procedures in parallel at major project sites such as Seoripul and Taereung in Seoul, shortening the timeline to groundbreaking by more than a year. Asked about public housing groundbreakings falling far short of the target so far this year, he said, "There is a very large volume that can break ground immediately in November or December, so by our calculations we can meet this year's target."