South Korean President Lee Jae-myung Signals Shift in Real Estate & Economic Policy
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Seoul, South Korea – In a New Year’s press conference held on January 21st, South Korean president Lee Jae-myung outlined potential shifts in the nation’s approach to housing, foreign exchange rates, and international trade, sending ripples through the domestic market. The President’s remarks suggest a possible extension of tax benefits for property owners and an optimistic outlook for the won, while also addressing concerns surrounding semiconductor tariffs wiht the United States.
Housing Market: Tax Relief and increased Supply
President Lee indicated a willingness to consider measures that could ease pressure on the housing market, stating that “making properties available for sale is also supply.” This statement has been widely interpreted as a signal that the government may extend the postponement of heavy capital gains taxes for multiple homeowners, currently scheduled to expire in May.
According to market analysts, the management is exploring ways to incentivize property owners to list their holdings. “The president’s remarks are likely a ploy for imposing and deferring the transfer tax for multiple homeowners,” explained one expert at Shinhan Premier Pathfinder. “However, even if the heavy tax and deferral are extended, a clear timeline for the end of the deferral will be crucial to encourage sales.”
Beyond tax adjustments, President lee emphasized the importance of increasing housing supply.He pledged to announce a “realistic plan” focused on permits and construction starts, rather than abstract targets. Potential sites for new development include the Taereung Fitness Center in Nowon-gu, Seoul, and the Yongsan International Business District.
Optimistic Forecast for the Won
In an unusual move, President Lee publicly predicted that the South Korean won would strengthen to around 1,400 against the US dollar “in a month or two.” This optimistic forecast appears to be linked to anticipated financial inflows, including the potential implementation of the Domestic Market Reversion Account (RIA) – offering tax benefits on overseas stock investments – as early as February.
Moreover, the President cited the expected inclusion of south Korea in the World Government Bond Index (WGBI) in April, which could attract as much as $60 billion in foreign investment. The announcement had an immediate impact, with the exchange rate falling from the 1,480 won range to 1,467.7 won during the day, ultimately closing the week at 1,471.3 won – a 6.8 won decrease from the previous day.
President Lee also addressed the recent proposal by the United States to impose 100% tariffs on South Korean semiconductors. While acknowledging the potential for price increases, he expressed a measured level of concern. “If that happens, the price of U.S. semiconductors will rise 100%,” he stated, adding, “I am not that seriously concerned.”
The President referenced prior negotiations with the US, were both countries agreed to apply “tariffs that are less disadvantageous than Taiwan’s” to the semiconductor sector. He expressed hope that Taiwan would “endure well” amidst the evolving trade dynamics. He further articulated a philosophy of prioritizing national interests, stating, “You can’t stay centered when you’re comparing your happiness to yours. In times like these, you need to be self-centered and respond according to ‘principles.'”
The President’s comprehensive address signals a proactive approach to navig
