Over roughly the year since his inauguration, the policy area that President Lee Jae Myung has addressed most frequently on X has been real estate. As of the 16th, posts related to real estate totaled 40 out of 625 overall (6.4%), the highest for any single topic. It has also been the topic mentioned most consistently over the five months since January this year. Analysis suggests that messages from the president are functioning as powerful signals that adjust market expectations.

President Lee intensified his real estate messaging on January 23, when he declared the end of the grace period for the heavier capital gains tax on multi-homeowners. He warned, “Abnormal holding out should not be profitable,” and, “There is no market that defeats the government.” On January 31, he asked multi-homeowners, “Do you think the normalization of ruinous real estate is impossible?” adding, “You will soon realize this was the last chance.”

The targets of regulation gradually expanded. Initially starting with the issue of capital gains taxes on multi-homeowners, he broadened the scope to the reduction of tax benefits for registered rental business operators, farmland speculation, corporate speculation in non-business real estate, and the issue of the long-term holding special deduction for a single home owned by a non-resident. The regulatory tools also widened from taxation to finance and criminal penalties. On March 18 he said, “If you disguise a loan as business funds and use it to purchase real estate, that constitutes fraud and will lead to criminal punishment,” and he mentioned the possibility of full-scale investigations and criminal complaints by the National Tax Service and the Financial Supervisory Service.

Behind these hard-line messages lies the current administration policy line of productive finance, which seeks to redirect funds concentrated in real estate toward productive areas such as industry and the stock market. If the structure of borrowing to invest in real estate on the expectation of rising home prices continues, funds that should go to corporate investment and industrial innovation become tied up in an unproductive asset market. This also aligns with the goal of resolving the Korea Discount (the undervaluation of Korean equities). On the 12th of last month, President Lee wrote, “If people make money by speculating in real estate with borrowed money, those who work hard lose motivation,” adding, “Strengthening productive finance is an inescapable path.”

He also confronted opposing public opinion head-on. On February 3, aiming at the People Power Party, which opposed the government plan to toughen real estate regulations, he wrote, “To those who feel pity for the tears of the hundreds of thousands of multi-homeowners who seek unearned income through real estate speculation, let me ask: Do you not see the bitter tears of the millions of young people who forgo marriage and childbirth because of housing costs caused by them?”

The messages from the president also affected the actual market. According to data from the real estate big-data firm Asil, the number of apartment listings in Seoul stood at 56,219 on January 23, when President Lee announced the end of the grace period for the heavier capital gains tax on multi-homeowners, but surged to 80,080 on March 21, up 42.4%. In KB Real Estate's ‘March nationwide housing price trends’, apartment prices in Seoul's Gangnam District fell 0.16% in March, marking a turn to decline for the first time in two years since March 2024.

A Blue House official said, “It is historically very rare for real estate prices in places like the three Gangnam districts to turn downward ahead of other areas during a price upswing,” and added, “It appears that President Lee's messages on X have influenced market sentiment.”