Top South Korean officials sell apartments amid property price furore

Seoul

AS SEOUL property prices soar, there is a new apartment on sale this month: For the best part of an estimated 1.1 billion won (S$1.28 million), you could buy a piece of future Gangnam glitz from reluctant seller Noh Young-min - the chief of staff of President Moon Jae-in.

Mr Noh is one of a group of senior government officials facing a public backlash over multiple-home ownership in one of the world's hottest property markets, where median apartment prices have rocketed more than 50 per cent in three years, KB Bank data showed.

His move to sell his Gangnam crib, the size of about three parking spaces but worth about 1.1 billion won by current market prices, came just ahead of Friday's government announcement that South Korea will further tighten property rules and impose heavier taxes on multiple homeowners in its latest effort to calm the market.

But more than 20 rounds of cooling measures in the past three years have failed to stop runaway prices.

Effective or not, the new steps announced by finance minister Hong Nam-ki - including raising real estate taxes on multiple homeowners to up to 6 per cent per year - will keep public focus on an issue that is wiping out a surge in Mr Moon's approval ratings from the handling of the coronavirus pandemic.

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"Today's measures will not have much effect on stabilising the property market, as the real estate tax hike will not be applied immediately," said Kwon Dae-jung, a real estate professor at Myongji University.

"The sale of high-ranking officials' houses is them doing the right thing morally, but that will not directly contribute to stabilising the property market. It can indirectly affect the market by hinting that the government will strengthen its regulations, but that's about it - just giving signals," he said.

Anger over the failure to calm runaway home prices has extended to government officials with multiple residences, under pressure to sell second homes to show they are committed to policy focused on imposing heavier tax penalties and mortgage curbs for multiple home owners.

For some voters, frustration has already turned to resignation.

Park Byung-jin, a 40-year-old office worker in Incheon, west of Seoul, said he has lost hope in Mr Moon's policies.

"I'm not even angry. They have been keeping all the good homes, and telling us not to buy anything is extremely unconvincing," he said.

Mr Noh, the chief of staff, has found himself at the centre of the controversy, because he had not sold his Gangnam apartment - small at about 46 square metres in size, but in an ageing building with huge development potential - some six months after instructing senior government officials to unload second homes.

He announced the sale in a Facebook post on Wednesday.

"With this opportunity, I will try to look back on myself and treat myself strictly going forward," he wrote.

His statement came the day before the finance minister himself committed to selling a second property.

"As a cabinet member, I am deeply ashamed of myself in front of fellow citizens and my acquaintances, amid controversy over multiple homes owned by public servants," he said in a Facebook post.

Of 64 senior government officials required to disclose their assets, 18 of them - or 28 per cent - owned more than one property as of June this year, showed data analysed by the Citizens' Coalition for Economic Justice, a civic group.

Apart from Mr Noh, at least five other officials in top government posts own homes in Gangnam and other expensive districts, said the group. REUTERS