-Honorable citizens of Seoul.
For the past twenty years, I, Min Seongcheol, have worked day and night for Seoul’s development, and now I stand before you once more.
We did it.
Green development through the restoration of Cheonggyecheon! Support for ordinary people through the bus transfer system! Housing stability through 30,000 New Town homes! The path our citizens of Seoul have walked over the past twenty years has truly been one success after another. Our Seoul, whose very name was once unfamiliar to the world, now proudly ranks 40th in global city reputation.
If I have one final task, it is to push that global competitiveness into the top ten and grow Seoul into a magnificent city like New York!
But there is one thing we must remember.
Which party was it that went against this dazzling history?
I remember it very clearly. When I proposed restoring Cheonggyecheon, Prime Minister Lee Chanho, who was my opponent at the time, opposed it with his eyes turned wild! I remember the incompetence of the previous administration, which doubled and tripled housing prices in Seoul through anti-market regulations!
Regrettably, that history is still repeating itself.
The giant ruling party with 190 seats has once again begun anti-market regulations, sending housing prices soaring and turning Seoul back into a housing hell!
Trapped in the mistaken belief that if they destroy supply, demand will also be destroyed, they are igniting an overheated real estate market!
But did we not already experience this during the real estate surge? Regulations that defy the principles of supply and demand produce side effects, side effects, and nothing but side effects!
My beloved fellow party members!
I, Min Seongcheol, will do it!
If you give me another chance, I will stand at the very front and fight the giant ruling party’s anti-market regulations! I will abolish regulations and calm housing anxiety with rational housing measures based on market logic! As we did during the New Town project, I will break through this supply-chain anxiety by selling apartments of an appropriate scale in the places that need them.
Please give me one more chance!
*
With the local elections one month away, Seoul once again heated up into a blazing city.
Experience from three terms, the premium of being the incumbent... Within a week of the primary, the Daehan Party settled on its candidate and began raising a large-scale argument for judging the administration.
-Min Seongcheol! Min Seongcheol!
-Bring back this stolen country, Min Seongcheol!
The atmosphere could not have been better.
The recent surge in housing prices had stimulated Seoul citizens’ PTSD from the real estate spike.
Min Seongcheol, selected once again as the candidate, took direct aim at the government’s regulatory proposals and expanded his momentum like a hot knife through butter, promising housing measures based on market logic... in other words, a supply bomb.
Where there is a feast, there is also a house of mourning.
Around the same time, Choi Sangdong, the Minguk Party candidate who had been selected as his party’s nominee, announced his candidacy in a chilly atmosphere and began pouring attacks on Min Seongcheol’s weaknesses.
[Min Seongcheol Already Over Half in Suitability Poll... Are There Any Variables in This Local Election?]
The leading fighters of both camps had entered the arena, but somehow the atmosphere already seemed to have tilted.
Even after unification had been completed, the Minguk Party candidate’s approval rating remained weak, while Min Seongcheol’s support had already surpassed half.
[A De Facto Vote of Confidence in the Government... Where Does Seoul Public Sentiment Stand?]
Watching the trend of opinion polls announced twice a day, I smiled bitterly.
It was an unfavorable stage. Midterm elections were inherently bound to be the ruling party’s graveyard, and the recent surge in housing prices had made the ruling party’s position even more difficult.
“...”
If my memory was correct, this election was one Min Seongcheol had won.
Of course, it wasn’t as if there were no variables. The factional disputes surrounding the former president and Dong Taegyun’s gold phone scandal dragged him down throughout the election, but in the end, I remembered that they could not overcome the housing price controversy.
“...”
But the margin had not been all that large.
Min Seongcheol, who had barely succeeded in defending his title, fought a close race to the end within the margin of error. I remembered that when the midterm election, known as the ruling party’s graveyard, ended in a difficult victory, even within the opposition party there had been talk of crisis.
“...”
I intended to place my hopes there.
The mayor of Seoul, effectively the vice president of Korea... If I changed that enormous flow of history, wouldn’t the future I knew also change a great deal?
“Welcome, CEO Ming.”
CEO Ming, whom I met in Seoul, wiped away cold sweat and handed me a document.
“How did it go?”
“As you instructed. We disposed of almost all the alternative investments recently made in Seoul real estate, and that money has been placed in the account you specified. However...”
“However?”
“There are still some real estate assets we haven’t been able to dispose of. Could we possibly put those on hold?”
CEO Ming asked me with a face that begged for understanding.
“Why? CEO Ming, you were against real estate investment.”
“That was before things happened. Looking at recent trends, it seems speculation is only just beginning to take hold. Considering various factors, this speculative momentum is an indicator that will likely continue for some time.”
“How much has it risen?”
“Even after subtracting all taxes and fees, it’s at least a return in the ten-percent range. To be honest, I’m dying of regret over the assets we suddenly disposed of as well. Let’s keep watching the remaining real estate.”
CEO Ming poured all his strength into laying out a rosy outlook for Seoul real estate, but it didn’t even reach my ears.
A ten-percent return on an investment in the twenty-trillion-won range meant two trillion... It was more than enough for election funds.
The task left to me now was to find the people who needed this money.
People who liked money more than titles, people who would come over to our side whenever their price was met, people who could mobilize organized votes, people who knew many of Min Seongcheol’s dirty secrets... Where could such talents be hiding? Should I start by asking around among his former aides, the standard route?
“I see. Seoul housing prices have no choice but to keep rising.”
“Yes, they’ll rise. There are already growing concerns of overheating in the stock market these days, so what could be better than an alternative product?”
“Then how is China’s xuequfang these days?”
“Xuequfang is...”
CEO Ming trailed off with an awkward expression.
The trends in China’s xuequfang, the equivalent of the Gangnam Eight School District, were unusual. It had once been synonymous with overheated speculation, and the Chinese authorities had blocked development in those areas through various regulations, but now, even though regulations were being eased, housing prices there were falling. It had all begun with Fengda’s bankruptcy.
“Well... are China and Korea the same? It’ll be a long time before we can resolve our supply bomb.”
Looking at things like this, I couldn’t help thinking that real estate was a truly frightening product.
Every economic crisis triggered in the twenty-first century had been about real estate.
Oversupplied real estate during the subprime crisis held America back for years, and oversupplied real estate before COVID was now holding China back. A little before that, during the Plaza Accord, there had even been a time when people said you could sell Tokyo and buy America.
“I think we’ll be the same.”
“...Pardon?”
“Seoul real estate is a byproduct of speculation, not a failure of supply measures. If the government implements an appropriate population dispersion policy, I think it will gradually settle down.”
“Then, Team Leader, do you view Seoul real estate as a bubble? Do you think it will fall soon?”
“If the government implements meaningful policies?”
CEO Ming looked troubled.
“...Isn’t that too idealistic? From what I’ve heard about Korea, the government doesn’t seem particularly willing.”
“I received a promise. They said they’d do it.”
“Pardon?”
“Well, it would take a long time to explain the details. In any case, please just launder this money cleanly and put it into this account.”
“...”
“Don’t be too regretful. Still, after just a few months of investment, you’ve already made a ten-percent profit, haven’t you?”
“...For an investor, failing to earn money that could have been earned is also a loss. Still, all right. Since this is something you led, Team Leader, I’ll do as you say.”
After finishing my meeting with CEO Ming, I hurried toward the KTX at Yongsan Station.
With the election just around the corner, our headquarters’ alternative investment office was also enduring a hellish schedule. It would not be an exaggeration to say that Seoul housing prices five years from now would be decided by the Seoul mayoral election taking place one month later.
That was why, these days, we were watching domestic opinion poll news more diligently than Nasdaq indicators.
“Yes, Director Yu, I’m leaving now. I’ll probably arrive in Iksan in about an hour.”
-Hurry up. All the entrusted companies are gathered here now. Looking at today’s poll, Mayor Min Seongcheol is over half again. If that man gets elected, it’s certain he’ll fire off a supply bomb... How on earth are we supposed to respond to this? Still, won’t the upward trend be hard to break for a while? Apartments don’t appear tomorrow just because you start building them today.
“As it happens, I came across very important intelligence related to that today.”
-What? Intelligence? What is it?
“I’ll tell you when we meet.”
After hanging up, I picked up my phone and turned on the news.
CEO Ming’s explanation that Chinese real estate was still in utter chaos was truly reassuring, yet at the same time, it put me on guard. The longer the Chinese authorities took to clean up their internal mess, the more time we would have to widen the technological gap.
“...”
Real estate... It was truly a difficult product.
In truth, the most ideal economic structure was one in which real estate became a lagging indicator.
A picture where the economy grew first, and when people’s wallets had become somewhat ample, housing prices rose appropriately?
But when have human affairs ever worked like that? If it seems as though the economy is going to grow, real estate rises first, and when the construction economy improves that way, it leads into a vicious cycle where that in turn contributes to GDP growth. Then even the government begins suffering from an optical illusion, unable to tell whether the improved indicators are because of real estate or because of economic growth.
That is why, ironically, you only know a real estate bubble after it bursts.
Even America, which was packed with world-renowned economic scholars and experts, had not predicted the subprime crisis. Only after Lehman collapsed did they realize that this had been the problem.
But how can you deal with houses that have already been supplied?
That is why, for any country’s government, real estate is always a headache.
Through cold economic indicators, one must determine whether this is speculative demand or genuine demand and respond with great precision. If you mistake speculative momentum and fire off a supply bomb, you will have to endure an enormous economic cold wave later. And if you mistake genuine demand and fail to increase supply, the public’s resentment will become tremendous.
-Everyone, I, Min Seongcheol, say this to the ruling party. Please come to your senses! Why do you not understand that all of these problems right now are a supply crisis? Just how long will you remain trapped in your belief that regulations can solve everything?
In truth, that was why supply was not a cure-all either.
Ironically, if we had poured out a supply bomb according to citizens’ demands during the zero-interest-rate period, we would now be in a lost decade. During the high-interest-rate period originating from America, Korea barely managed a soft landing in real estate. If the government had failed to overcome public sentiment, wouldn’t several of our construction companies have gone bankrupt too?
Of course, the side effects had not yet passed.
During the era of the 1,500-won exchange rate, the reason the Bank of Korea clenched its teeth and could not raise interest rates was ultimately because of real estate. There were even complaints among the public that, because of Seoul real estate, the Bank of Korea had given up on the exchange rate.
“...”
Thanks to that, I could be even more certain.
Right now, when housing prices were stirring, was the perfect opportunity to implement a population dispersion policy. If we could not escape the Republic of Seoul, the entire nation would once again have to suffer guilt by association because of Seoul housing prices.