South Korea’s AI property boom puts pressure on president

{"text":[[{"start":7.6,"text":"For Lee Jung-ha, a 31-year-old fashion merchandiser and mother of a newborn, buying an apartment for her family is an unaffordable dream. In her leafy Seoul suburb, her rental apartment would have a purchase price of Won1.9bn ($1.4mn)."}],[{"start":25.32,"text":"That is 30 per cent higher than two years ago, driven higher in part by the AI wealth percolating through South Korean society. “I should have stretched myself financially and bought the apartment two years ago when I married,” said the new mother."}],[{"start":38.88,"text":"Seoul, whose greater metropolitan area is home to half of Korea’s 51mn people, is the world’s third most expensive property market, trailing only Hong Kong and Zurich, according to Deutsche Bank. Prices have more than doubled over the past decade to $25,545 per square metre in the city centre."}],[{"start":59.08,"text":"The country’s property sector is a “ticking bomb”, President Lee Jae Myung said last month, warning it could trap the Korean economy in decades of stagnation, worsen inequality and discourage couples from starting families in a country that already has one of the world’s lowest fertility rates."}],[{"start":75,"text":"“The real estate bubble has reached a point where it can no longer be ignored,” he said. “We must devote all available means and resources to tackling the real estate problem, which is . . . threatening people’s livelihoods and the country’s future.”"}],[{"start":89.32,"text":"An extraordinary boom in artificial intelligence has lifted the fortunes of semiconductor workers and property prices near Samsung and SK Hynix plants in the greater Seoul area. With apartment prices in the capital rising 14 per cent during the president’s first year in office, he is under increasing pressure to fulfil campaign pledges to deliver affordable housing."}],[{"start":null,"text":"

"}],[{"start":111.16,"text":"But the country’s leader is struggling to find the right balance between curbing speculative demand and sinking house prices. A sharp drop would anger millions of existing homeowners, while a continued price rally risks making it even harder for young Koreans to get on the housing ladder."}],[{"start":126.84,"text":"The government introduced tighter caps on mortgage loans in October, restraining the purchasing power of young people. Last month, it also doubled its ceiling on household debt growth to around 3 per cent this year to support home purchases by young people, but many argue this is not enough."}],[{"start":143.64,"text":"Authorities also announced plans for more than 230,000 additional homes in the Seoul metropolitan area, on top of an existing plan to build 1.35mn homes in the region by 2030."}],[{"start":155.64,"text":"Lee’s approval rating, meanwhile, has fallen to 40 per cent, according to a Gallup Korea poll last week. Among Koreans in their twenties, that figure is 25 per cent. “The biggest factor in his falling popularity is real estate,” said Shin Yul, a professor of politics at Myongji University."}],[{"start":172.8,"text":"“The key problem is limiting loans. How can you buy a house without loans? Stringent regulations are making home ownership almost impossible for many young people,” said Shin."}],[{"start":183.2,"text":"An overheating property market is a particularly sensitive political issue for Lee and his Democratic Party. Soaring Seoul property prices were widely seen as having contributed to the party’s loss in the 2022 presidential election."}],[{"start":197.16,"text":"“Few issues matter as much to the public as housing, but real estate has been the Achilles heel of the liberal governments,” said Suh Bok-kyung, a political commentator. “People feel more anxious about their asset values amid stock market volatility, higher inflation and increasing job insecurity because of AI.”"}],[{"start":215.52,"text":"Targeting the other end of the housing market, Lee’s administration has also unveiled plans to raise holding taxes on people who own multiple homes and expensive properties and to scrap benefits for non-resident single homeowners."}],[{"start":227.64,"text":"That move also sparked a backlash as critics say it has pushed landlords to raise rents or move into properties that could otherwise be leased. Faced with strong public resistance, the government walked back some of the changes to the tax scheme, restoring tax benefits for single-homeowners."}],[{"start":244.12,"text":"One of those affected was Lee, a 57-year-old who owns three apartments in wealthy districts of the capital and did not want to give her full name."}],[{"start":null,"text":""}],[{"start":251.8,"text":"She said she was struggling with the higher property taxes but planned to wait it out rather than sell in the hope that a conservative administration would overturn the measures."}],[{"start":259.4,"text":"“I can’t sell them because of high capital gains taxes. Even if I sell them, I can’t find better alternatives. Stocks look riskier now. I’d better just wait until a new administration comes in and changes policy,” she said, voicing frustration with the different administrations."}],[{"start":274.8,"text":"“I wish the government would just leave the property market alone,” said Kim Dan-bi, a 34-year-old newly-wed in Bucheon, west of Seoul. She is one of the lucky ones, having hit a “jackpot” by buying her apartment before the government introduced tougher lending restrictions in 2025."}],[{"start":290.24,"text":"“You can’t sell a house even after it rises in value because of high taxes, while people who need homes can’t buy them because of lending restrictions,” she said."}],[{"start":298.96,"text":"Lee, the new mother in greater Seoul, expressed similar frustration with volatile government policies. “The government says they will do this and that to stabilise the property market but housing prices keep going up,” she said. “I have no hope and am just suffering from the fear of missing out.”"}],[{"start":315.44,"text":"Data visualisation by Haohsiang Ko in Hong Kong"}],[{"start":322.31,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1788853787_2146.mp3"}