The Korea Research Institute for Human Settlements (KRIHS), a state-run think tank under the Ministry of Land, Infrastructure and Transport, released a shocking report on September 1 blaming the news media for the high inflation of Seoul housing prices.
The Moon Jae-in administration has denied the fact that its convoluted series of real-estate policies has failed to stabilize the market and has often blamed the increase in housing prices on speculation. This time, the government has apparently chosen a new target. This is yet another example of how the Moon administration views the media.
“The hike in housing prices at Seoul’s Gangnam region was heavily affected by the news media,” the institute stated in a press release. It argued that there were more people who expected that housing prices would go up whenever the media publishes articles such as “the market reaches its highest price.” The institute argued that this kind of sentiment made people purchase homes at a higher price.
The report did not specifically explain how news articles affected public sentiment on the real-estate market. It did, however, argue that “the news media did not have much impact on the national level, but it had a significant effect on people purchasing apartments in Seoul at an inflated price.”
The institute failed to look at various other factors that could impact the real-estate market trend, including the government’s new policies and regulations and the interest rate. The institute explained to the media that “we were not able to analyze the impact coming from government policies, as it is hard to analyze the data if we include too many factors.”
Lee Chang-moo, professor of urban planning and engineering at Hanyang University, told the JoongAng Ilbo newspaper that the latest report is illogical. “The media normally reports the fact that the market reaches a new ‘highest price’ after it happens, not before, so it cannot be the cause of the new high price,” he said. “There are various factors to consider when analyzing the rise in housing prices and public sentiment on the market trend, but they ignored all these and made a simple comparison. This could influence people to take a distorted view on the actual situation.”
Shim Kyo-eon, a real estate professor at Konkuk University, also criticized the report for its poor research methods. “If the factor of the media reports survived after analyzing all related factors, including the government policies and interest rate, I would guess it could be significant, but they only looked into this one factor. It is almost like a witch hunt,” he said. “The reason why housing prices in Seoul’s Gangnam region rose was because there was more demand among people who tried to purchase ‘one smart home’ in the region, as the government announced a series of new regulations on the real-estate market.”
Gangnam is considered the wealthiest area in South Korea. Housing prices there do not typically drop or fluctuate as much as other regions. The Moon administration’s new regulations include restricting people from applying for a mortgage and limiting the amount they can borrow if they already own a home. Due to these regulations, more people believed purchasing an apartment in Gangnam would be a better long-term investment if owning multiple homes would become difficult.
South Korea is the size of the U.S. state of Indiana. Around 52 million people are living in this small country, and population is high in Seoul and other urban areas. South Koreans are very sensitive about the real-estate market.
The real-estate situation has been the biggest factor in the decline of President Moon Jae-in’s approval ratings. According to a survey by Gallup Korea on August 27, 38 percent of respondents thought positively about Moon, while 54 percent thought negatively about him. Among those who disapproved of Moon, 28 percent of them cited his real-estate policies as their reason. It was followed by his measures to deal with COVID-19 with 14 percent and the overall economic situation with 11 percent. North Korean policies came in fifth with 4 percent. This shows how seriously people take the real-estate issue.
Housing prices have soared under the Moon administration. According to the Korea Real Estate Board, the average housing price rose 73 percent from 284.78 million won ($245,605) in May 2017 to 491.73 million won ($424,087) in July this year. Seoul experienced an even more significant increase. During the same period, it rose nearly 200 percent from 570.29 million won ($491,841) to 1.19 billion won ($1.02 million).
The media is becoming a major target of South Korean leftists as President Moon’s term in office is nearing its end. In another blow to the country’s ruling Democratic Party (DP), the United Nations Special Rapporteur on Freedom of Expression issued a rare warning to the South Korean government on Monday over a controversial media bill, saying it could “severely limit freedom of expression.” Special Rapporteur Irene Khan sent the warning in a letter last Friday, according to the South Korean Foreign Ministry on Tuesday.
In her letter, Khan expressed concern over the bill’s potential to infringe on freedom of information and expression and called for the bill to be revised to comply with international human rights conventions, to which South Korea is a party.
Khan characterized the bill as imposing “vague” and arbitrary restrictions on such freedoms, saying any relevant law should be clear and made public. She further warned that the law could have a chilling effect on domestic media, resulting in self-censorship, if media outlets were subjected to the five-fold increase in penalties for releasing false or fraudulent news that the bill proposes.
In a statement posted to its website on August 24, Reporters Without Borders voiced its support for domestic media groups’ opposition to the amendment to the Press Arbitration Act. “The proposed amendment could open the door to any arbitrary interpretation and possibly be instrumentalized to put pressure on the media,” said the group’s East Asia Bureau head, Cédric Alviani. “No matter the legitimacy of the fight against disinformation, legislators should never create new legal tools without ensuring they include sufficient guarantees, as court decisions can be very subjective on those sensitive issues.”
The Press Arbitration Act’s harsh five-fold increase in penalties on media outlets that release false or fraudulent news reports has led to accusations from the media industry that the law is intended to suppress criticism of the ruling party ahead of next year’s presidential election. One of the other controversial changes to the law is setting the damages based on the amount of each media outlet’s revenue over the previous year. In South Korea, the top three biggest newspapers are considered more conservative than others. They are strong critics of the current Moon Jae-in administration and other leftists.
The ruling DP holds a parliamentary majority of 60 percent in the 300-seat legislature. It can technically pass the bill by itself once the voting session is convened. The main opposition People Power Party (PPP) said that it will try to filibuster the bill.
