[Did the 10.15 Measures Work?]
[Seoul Housing Prices Stabilizing, Related Expert Says, “For Now, a Victory on Points for the Government, but We Need to Watch Longer”]
[Housing Prices Have Been Reined In, but Jeonse Prices Have Soared... Nationwide Jeonse Price Increase Hits All-Time High]
[The Nightmare of Jeonse Fraud Creeping Back...]
[Head of the Korea Real Estate Board: “The More Similar Sale Prices and Jeonse Prices Become, the Greater the Risk of Jeonse Fraud”]
Roh Moo-hyun, who had strongly advocated relocating the capital, did not yield even to the Constitutional Court’s ruling, and in the end moved the civil servants to Sejong.
Naturally, the backlash was no small thing.
Not only the civil servants’ union, but also the opposition party and even the citizens of Seoul rose up, clamoring that Korea would be ruined.
And understandably so. Buying land, putting up buildings, and laying down roads required astronomical sums of money. On top of that, homeowners who had already bought apartments in Seoul had no choice but to oppose something that would obviously cause housing prices to fall.
Just then, Seoul Mayor Lee Myung-bak, who had become a presidential contender thanks to Cheonggyecheon and the bus transfer system, came up with a very good solution for this.
Seoul, already developed as it was, could not be helped, but the provinces would be developed in balance by attracting new growth industries and the like. And for the residential stability of Seoul citizens, the state would establish a jeonse loan system.
And so, in Korea, the jeonse system established itself as a major means of housing.
If one only looked at the two men’s explanations, MB’s proposal seemed far more reasonable.
Protecting the existing industrial base would also infringe less on Seoul citizens’ housing prices. If new businesses were fostered in the provinces, provincial housing prices could develop in a balanced way as well.
Jeonse, which returned the principal in full when one moved out, would surely be cheaper than monthly rent, so it would reduce the people’s housing cost burden too.
Roh Moo-hyun, who had turned civil servants into demolition-displaced residents straight out of The Dwarf, somehow seemed like a bit of a radical, and his argument seemed extreme. Since a president with the duty to uphold the Constitution had bypassed the law through the relocation of the administrative capital while ignoring even the customary constitution ruling, he seemed like an exceedingly unconstitutional president.
But now someone has to answer.
Then why did Eunma Apartment, which was 600 million won at the time, become 4 billion won now?
If balanced development was possible, why has the population of the capital region now surpassed 26 million?
Why, among 60,000 unsold apartments, are 80% in the provinces, while Seoul still has a problem because there are no homes?
Jeonse is clearly a good system, so why does gap investment flourish every time real estate starts stirring?
If the civil servants had not been moved during the Participatory Government, how much would Seoul housing prices be by now?
“...”
It was strange.
MB’s plan had certainly seemed far more reasonable, yet Seoul housing prices did not flow the way we wanted.
Apparently in politics, there is no such plan where both sides benefit, huh? If so, someone has to take the bullet and implement a population dispersal policy, but who will do it?
“...”
There was no one.
If my memory is correct, Eunma Apartment eventually broke through 10 billion won.
Gangnam housing prices were a burden on every administration, regardless of ruling or opposition party, like a bomb collar, and whether it exploded or not was purely a matter of luck.
“Team Leader. The ten consignment firms selected this time have all gathered in the conference room.”
“Ah, yes. I’ll be there shortly.”
I stopped my thoughts as I rolled the pen in my hand and headed to the conference room.
Over the past month, the Alternative Investment Office and I had selected ten consignment firms after fierce deliberation, and today was the day of our first meeting.
A consignment contract worth 50 trillion won was a size rarely seen even in sovereign wealth funds, and thanks to that, global REITs fund firms had rushed to Jeonju with their sleeves rolled up.
“It’s a pleasure to meet you. I’m Team Leader Lee Sejun, and I’ll be in charge of managing the consignment firms going forward.”
When I entered, the representatives of the leading fund companies stood up to greet me as though a judge were entering the courtroom.
“Yes, good to meet you. I’m Richard from Asset Balance.”
“I’ve heard a lot about you. I hear Asset Balance has considerable expertise in buying and selling offices.”
“I don’t mean to boast, but our Asset recognized Silicon Valley’s potential even before the startup craze swept through it. At present, 10% of Silicon Valley startup companies are paying rent to us. Haha.”
“Team Leader, good to meet you. I’m Daniel from Property.”
“Yes. I’ve heard a lot about your company as well. I hear you stand out considerably in retail REITs?”
“Yes, when it comes to commercial real estate such as shopping arcades and malls, we are confident we rank first compared to anywhere in the world. From what we’ve grasped, Korea also has many promising commercial properties. This selection of consignment firms was an excellent choice.”
I exchanged greetings and pleasantries with the ten representatives.
All of the consignment contracts this time were with foreign private equity funds; there was not a single Korean company.
“Yes, understood. Since the introductions seem to be more or less over, let’s begin the meeting in earnest.”
Soon, when the PowerPoint began, everyone looked at me with tense expressions.
That was because once today’s meeting ended, only the formal contract procedure of stamping seals would remain.
“Since such capable fund firms have gathered here, I won’t speak at length. I’ll explain a simple manual.”
“Yes, yes.”
“NPS aims for the principle of autonomous investment. We will not interfere at all with where the consignment firms invest, and we will judge you solely by your results.”
“Yes, yes.”
“As the middle manager, I act on behalf of Mister Yu, the person in overall charge. Therefore, if there are any parts of your portfolios, acquisition directions, or the like that require discussion, you may speak through me.”
“Yes, yes.”
“And one last thing. This is a rather important matter. Once you are selected as official consignment firms, I recommend that you invest half of your assets here first.”
I passed around the documents I had prepared.
“Yes, yes?”
The reaction I expected came back.
“...Team Leader. What is this?”
“A recommendation. You don’t have to do it, but it’s something I secretly hope you will.”
“What do you mean by that? No, setting everything else aside, you’re telling us to acquire the Korean housing market?”
“Yes. Not just ordinary housing. Please mainly acquire apartments in Seoul, apartments close to Gangnam, and apartments in Gyeonggi-do close to Gangnam.”
“T-Team Leader...?”
“Ah, and there will be limits to buying and selling through establishing real estate corporations. But I don’t think investment necessarily applies only to buying and selling. At present, loan regulations are quite strict in overheated speculative districts, so please bypass them through P2P loans. Of course, regulations apply to P2P loans too, so loan approval won’t be easy, but they should be less strict than regulations on the first and second financial sectors. And I understand that everyone here is well versed in real estate. Please consider various methods to break through or bypass regulations and submit them in reports.”
“I’m sorry, Team Leader... but didn’t what you just said mean that you want us to bring you expedients?”
“Yes, that’s right.”
As everyone stood aghast, Daniel, the representative of Property, shot his hand up.
“T-This is absurd. Team Leader. We at Property are well versed in Korean real estate conditions. We know that the regions you just mentioned are places where the Korean government is watching with bloodshot eyes to stop speculative forces. But measures like this on our part can only invite speculative capital.”
“Then wouldn’t that be even better for Property?”
“...Excuse me?”
“If speculative capital pours in, that means housing prices rise. Is there anything about that that wouldn’t help your company?”
“That’s not what I mean...”
“If that is truly your opinion, I respect it. The proposal I just made is, after all, only a recommendation, not an obligation. Representative Daniel, do you have no intention of following it?”
At those words, every gaze turned to Daniel.
Daniel pondered for a long while, then spoke with difficulty.
“If it is merely a recommendation... honestly, it would be difficult. We are a fund specialized in retail REITs, and there are many promising commercial properties in Korea as well. If you grant us autonomy, we would like to proceed with investments according to our portfolio.”
I nodded.
“I see.”
“...May we do that?”
“Of course you may. NPS always respects the autonomy of its consignment firms.”
“T-Thank you. Our portfolio will also surely produce returns beyond expectations...”
“However, Representative Daniel, I think we will need to consider our consignment contract with Property a little further.”
“Yes, what?”
“When I look at your company’s investment returns, the mixed-use commercial housing you acquired during the low-interest-rate period took a direct hit during the high-interest-rate period and caused considerable losses.”
“No, Team Leader. At that time, it couldn’t be helped. What REIT didn’t suffer losses during the high-interest-rate period sparked by the United States? At that time, all global real estate was in a slump.”
“Personally, the phrase I hate most is ‘it couldn’t be helped.’ I also dislike watching what others think when an easy way to make money is plainly right in front of us. We will consider the consignment contract with Property a little further.”
“...Excuse me?”
I turned my head.
“Is there anyone else with a differing opinion?”
As expected of people who handled money, they were quick on the uptake.
All the representatives who understood my meaning quietly closed their mouths.
*
[Breaking News - Gangnam Real Estate Growth Rate Expands Again!]
[Have the 10.29 Measures Lost Their Effect? Up 0.5% Compared to the Previous Week!]
[Seoul Shaken Again as Gangnam’s Invincibility Begins... Following Ma-Yong-Seong, Even No-Do-Gang Shows Large Gains!]
The 10.29 measures, which had been evaluated as a powerful preventative shot, did not keep their effect for even six months.
After December ended came the peak season of January and February, when people moved for the new school year. Coinciding with moving season, growth suddenly began expanding around Gangnam.
And so the soaring real estate virus that began in Gangnam soon spread to adjacent areas.
One day, when Gangnam’s upward trend recorded a three-week consecutive high, Ma-Yong-Seong near Gangnam and even No-Do-Gang jumped, stimulating Seoul citizens’ PTSD.
[Minister of Land, Infrastructure and Transport: “Interpreted as Temporary Demand Coinciding with Moving Season, Not Yet at a Meaningful Level”]
[Ministry of Land: “Watching Current Situation Very Sensitively, Additional Regulations Will Be Announced if Necessary”]
Accordingly, the ministers of related ministries all issued stern warnings about Seoul housing prices, but for now drew the line at additional regulatory measures.
And understandably so, since real estate regulation required tremendous courage.
If they regulated loans, they were criticized for making policy for the cash-rich; if they raised capital gains taxes to regulate transactions, they were cursed for the government being obsessed with taxes.
[Irresponsible Ministry of Land! Fiddling with LTV Again!]
[Ministry of Land: “Homes with Sale Prices of 1.2 Billion Won or More May Be Subject to LTV Limits” Are They Planning to Break the Housing Ladder for Young People Again?!]
The Blue House Oval Office.
President Kim Sangcheol gazed at the distant sky with a face devoid of laughter.
Had the ringing of the Bosingak bell been the bell tolling for my life? Since the people’s cries had erupted from the very start of the new year, he kept feeling as though the former president who had gone before him was beckoning from the sky.
“...”
If they failed to stop real estate again this time, it would be three consecutive defeats. He knew all too well that his half-brother, whose approval rating had reached 80% in his final years, had lost power because of this one issue.
“Mr. President... the State Council meeting has ended.”
As he was looking at the distant sky like that, Lee Chanho opened the office door.
The president ground out his cigarette in the ashtray, then asked with a murderous expression.
“Seoul real estate... why the hell is it acting up again?”