(Unofficial Translation)

The world is now mired in three unprecedented predicaments caused by abnormal weather conditions coupled with the COVID-19 pandemic and economic downturn. Amid these hardships, the Government is working closely with the people to weather the crisis. We have been seen as setting a standard for epidemic prevention and control and enabling the economy to fare relatively well. We are also doing our utmost to protect the people’s safety and property from torrential rains.

The Government will do everything possible, without the slightest dereliction, to safeguard the life and safety of citizens as well as to protect the economy and people’s livelihoods. While renewing our commitment with greater humility and reflecting on our shortcomings, the Government will manage state affairs with full responsibility. I also ask everyone to come together with one mind to overcome the crises our nation is facing.

Prolonged, record-breaking downpours and the longest rainy season on record – over 50 days now – have wreaked havoc on the entire country. Above all else, the many casualties caused by heavy rains are particularly heartbreaking and regretful. Once again, I extend my deepest sympathies to the victims and their relatives.

Even though the rainy season is nearing its end, a typhoon is heading north at this time. I urge you to remain fully prepared and do everything you can to minimize damage. I also call upon you to take proactive measures to assist the afflicted areas and help those affected recover. Seven cities and counties have already been declared special disaster zones, and even more stricken areas need to be promptly added to the list.

All available resources, including military personnel and equipment, must be mobilized to help in the disaster recovery efforts. I also call on you to closely take care of displaced residents and those currently in temporary shelters to ease their suffering and get their lives back to normal as soon as possible. At the same time, you must determine what caused the damage and hold those responsible accountable. I trust you will work with specialists to carry out in-depth investigations and assess how well dams have been maintained and what impact weirs have had on the four major rivers. This is an opportunity to conduct evidence-based analysis of how those weirs contribute to flood control.

Extreme weather events are causing catastrophic disasters in many parts of the world. In addition to the heavy rains across Asia, Siberia has registered its highest temperature in 80,000 years. At the same time, Europe is suffering enormous difficulties from sweltering heat waves. Abnormal weather conditions worldwide fueled by global warming will become increasingly severe. Our country will actively participate in international cooperation regarding climate change. We will also step up our national safety standards and management systems in preparation for future weather changes.

Housing has become a pending task of paramount importance for people’s livelihoods. In response to the recurring housing market instability, the Government and the ruling party have come up with all-encompassing, unprecedented measures beyond the market’s expectations and have completed relevant legislation in the National Assembly. Now, the Government will take on the task of ensuring fairness in housing. The unwavering principle here is to staunchly protect genuine homeownership and eradicate real estate speculation without fail. Accordingly, we have prepared a four-point policy package aimed at retrieving unearned income, curbing speculation demand by tightening loan regulations, maximizing housing supply, and protecting tenants. It can be referred to as a comprehensive version of the housing policy.

First, we have devised a mechanism to stem speculation-driven demand through tax reform on unearned income. The measure curbs speculation demand by increasing the tax burden on profit-driven individual and corporate owners of multiple homes and strengthening taxation on short-term gains from investments. This shows our resolve to “end the era of real estate speculation.”

Second, we have taken measures to prevent the housing market from overheating by blocking the inflow of speculative funds. We have removed factors that destabilize prices by tightening regulations on housing loans and preventing so-called gap investments. These measures are also aimed at making households and the financial sector more secure and driving excess liquidity into productive areas.

Third, we have prepared a groundbreaking supply plan for genuine demand. In line with this plan, the Government will designate military-owned golf courses, key sites occupied by public institutions and other new land for housing construction; raise the floor-area ratio in the third new town; and allow apartment complexes to be reconstructed with a greater number of units with the participation of public institutions. We have significantly increased the opportunities for those with no home, newlyweds and young people to own their homes. At the same time, we will reduce the burden of purchasing a home for those who do not yet own one by introducing a new system that allows them to buy public tract houses through long-term installments.

Fourth, we have greatly enhanced the rights of tenants. Dramatic changes have occurred in the 40 years since the Housing Lease Protection Act was enacted; renters have been guaranteed a two-year extension on their usual two-year contracts, and a cap on monthly rent or long-term lease deposit increases has been introduced. The aim is to improve the lopsided relationship between landlords and tenants so that they can enter into fair contracts. The Government is committed to ensuring that the rights of landlords and tenants are balanced by helping the new system take root as early as possible.

The effects of this comprehensive policy are gradually emerging. The once overheated housing market is stabilizing, and the upturn in housing prices has started to subside. When the effects of the policy are in full swing going forward, this trend is expected to accelerate further.

Governments around the globe often actively intervene in housing markets by strengthening taxation rather than relying solely on market forces. Our policy has raised property taxes, but they are still low relative to those in other advanced countries. Korea’s effective property tax rate is still about half of the OECD average. Korea is still very much behind major countries in terms of protecting tenants. Germany, France, the United Kingdom, Japan and the United States all grant the right to unlimited renewals of housing leases, barring exceptional reasons. Importantly, major cities often impose a standard or fair rent system to limit increases.       

Housing should be changed from an object of speculation to that of residential welfare. However, I know that people are very anxious as the related system has been modified considerably this time. The Government will inform the public of the policy changes in detail and seek the people’s understanding. We will do all we can to prevent confusion on the ground. In addition, since a perfect policy is impossible, we will continue to enhance it.

Going forward, we will also review measures to further reduce taxes on those who own one home which is in the low- to mid-price range. Public housing will include not only permanent rental homes for low-income households but also high-quality, life-long residences where even the middle class would want to live. The Government will quickly devise other necessary follow-up measures related to transportation and other issues. If necessary, we will consider the establishment of an agency for overseeing the real estate market to ensure policy effectiveness. We will also strive to improve the quality of substandard dwellings, including gosiwon*, jjokbang**, basement units and tarp-covered greenhouses.

I also ask for cooperation from politicians and the media. I hope they work together to help our new policy take root and to stabilize the housing market rather than raise people’s anxiety or incite conflicts between homeowners and non-homeowners and also between landlords and tenants.  


* gosiwon: a building with tiny rooms rented by those preparing for exams
** jjokbang: one of many cramped units made from partitioning rooms in low-rent districts