[Start Economy] 1,000 multi-homeowners 'sweep' 40,000 houses in five years

■ Host: anchor Lee Jung-seop, anchor Cho Ye-jin
■ Starring: Seo Eun-sook, professor of economics and finance at Sangmyung University

* The text below may differ from the actual broadcast content, so please check the broadcast for more accurate information. Please specify [YTN News START] when quoting.

[Anchor]
We deliver the latest economic news quickly and kindly. Start Economy, today we will be with Seo Eun-sook, a professor of economics and finance at Sangmyung University. Welcome, professor. Although the recent increase in housing prices has decreased, we have reported that housing prices continue to rise at this time. Looking at the statistics of who bought how much and how many houses in the last 5 years, the top 1000 people bought over 40,000 houses?

[Seo Eun-sook]
This is the result of Min Hong-chul, a member of the National Assembly's Land, Infrastructure and Transport Committee, analyzing the data submitted by the Ministry of Land, Infrastructure and Transport on the 6th. Analysis of data on the top 1000 people who purchased the most houses overall, including apartments, row houses, and multi-family houses, in the five years from 2019 to 2023 showed that the top 1000 people bought about 41,721, or about 6.1475 trillion in terms of home purchases. It has been confirmed that the number one buyer who has purchased the most houses has bought 793 houses in the past five years. It was found that the cost used at this time was about 115.8 billion won. There were also 45 buyers who bought more than 100 units in five years. It turned out that 158 people also bought more than 50 units. It was found that the top 1% of homeowners purchased 4.7 houses on average. Based on the official land price, these values are found to be about 3 billion won on average. These figures are released every year. In the previous year, there were 4.56 units. So the implication of this is that we can interpret that the polarization of real estate assets is getting a little bit deeper. Actually, this figure is not related to the common people's point of view. Therefore, it is in preparation for the fact that most ordinary people are experiencing economic difficulties due to housing instability. As a result, I believe it will be difficult for real estate speculators to avoid criticism that they are leading housing purchases in the process of increasing assets and causing the national economic instability, which is currently a problem.

[Anchor]
As you said, it feels like a different world, but in the end, housing prices should be stabilized to prevent money from being concentrated on real estate and help ordinary people to buy their own homes. Wouldn't interest rates be important here? How do you think the Bank of Korea will decide the interest rate this time?

[Seo Eun-sook]
The Monetary Policy Committee will be held on the 11th of this week, and the Bank of Korea will decide the base rate. Currently, the base rate has been frozen for 13 consecutive times, as we know, at the 3.5% level. If we cut the base rate this time, it could be a situation where we use a policy to cut it in some ways in about 38 months since we raised the interest rate by 0.25 percentage points in August 2021. First of all, the Bank of Korea considers two things when writing monetary policy. The first is price stability. It's the most important issue. The second focuses on financial stability. We generally think that price is the most important thing when determining the base rate, but we rose 1.6% in September compared to the same month last year. This is the first phenomenon to appear below 2% in three and a half years since the 1.9% increase in March 2021. The Bank of Korea also announced that the rate of increase in consumer prices will remain below 2% for the time being, but will fluctuate around 2% after the base effect is considered toward the end of the year. So to sum up, if consumer price growth is less than 2%, economic domestic demand is sluggish, and export growth is predicted to slow down in the future, this will be a downward risk. In addition to this, the U.S. cut the Fed's interest rate again. If that happens, I think the pressure from the Bank of Korea to cut will be enough. However, the situation is ambiguous to cut it, the current situation. Because the government is now very sensitive to household loans and then housing prices. As a result, the Bank of Korea is expected to decide after looking at these trends.

[Anchor]
In the end, as you mentioned, the factor that determines interest rates is financial stability or price and economic stability, but market experts conducted a survey by media companies, and many predicted that they would cut interest rates based on price stability rather than financial stability. One of the biggest reasons most experts predict that

[Seo Eun-sook]
will cut prices is that prices are very stable, consumer price targets have already been met, and the Fed has cut interest rates, so the Bank of Korea is now likely to cut rates. The Bank of Korea has announced until recently that our economy is not bad and domestic demand is recovering. In this situation, it is a little ambiguous for us to cut interest rates due to sluggish economy or growth. This is the situation where it's been announced. In addition, as the government explained earlier, household loans and housing prices are very sensitive. That's why September's increase in household loans was dampened. But in September, as you know, the Chuseok holiday was very long. So there's a situation where it's very ambiguous to say that the trend has shifted just by looking at this month's trend. So if the Bank of Korea lowers interest rates right away in October, there will be a policy mismatch issue. Therefore, from the perspective of the Bank of Korea, I decided to check the overall trend and choose to cut it in November or maybe around the end of the year. And if you cut interest rates, you have to affect the economic experience and consumption. However, if we already cut interest rates, the market interest rate and then the loan interest rate should fall together. However, the market interest rate has already been reflected because we expect interest rates to fall in the market. It's falling. However, in the case of loan interest rates, the additional interest rate is being applied due to our household debt and it is not falling. So overall, I think these are difficult situations for the Bank of Korea to cut interest rates.

[Anchor]
I see. If the Bank of Korea decides again, we will point it out again at this time. We have a lot of topics left, so let's move on quickly.
The first parliamentary audit of the 22nd National Assembly begins today. It will be a place to reflect on Korea's economic policy, but the problem of tax loss will inevitably arise here, right?

[Seo Eun-sook]
The audit of the Ministry of Economy and Finance is said to be held for two days on the 10th and 11th, but it has now been announced that the tax revenue will be about 30 trillion won short of the 367.3 trillion won budget, and this will be a very major issue. Because last year's tax revenue loss was 56.4 trillion won. It is said that this represents the scale of all-time error for two consecutive years, and in fact, it is not clear about alternatives to make up for this lack of tax revenue, which is likely to be controversial.

[Anchor]
The part directly related to this tax deficit is the government's audit policy. This part will also be an issue, right?

[Seo Eun-sook]
Of course, we don't have enough money to spend, but this government has used tax cuts for two consecutive years. So, for example, the opposition party is likely to focus on lowering the maximum corporate tax rate, expanding inheritance deductions according to various tax law amendments, and abolishing the premium tax for the largest shareholder.

[Anchor]
In addition to this tax issue, the Czech nuclear power plant and the blue whale project, which the government is now emphasizing as an achievement, seem to have some debate.

[Seo Eun-sook]
In the case of the Czech nuclear power plant, there are two issues. This means that a consortium of KHNP and South Korea has been selected as the preferred negotiator for the construction of two new Dukovani nuclear power plants in the Czech Republic. When it is selected, the project cost is about 24 trillion won, and it has submitted a letter of intent to provide financial support if necessary, but usually when working on a large project, a letter of intent for such financial support is submitted. The Ministry of Commerce and Industry also announced that it is generally submitted by custom. Nevertheless, it is highly likely that the decision to provide financial support played a decisive role in the selection of preferred negotiators. According to the World Nuclear Industry Status Report released last month, the Czech government has raised a problem with fiscal soundness because it is very difficult to wait for all the construction costs of new nuclear power plants. As a result, I think they are raising questions about the possibility of not getting the money back or losing it if the business is not doing well. The second issue is the Westinghouse issue in the United States. This is because Westinghouse in the United States has the technical intellectual property rights of the Nuclear Power Plant Construction Agency, and a lawsuit is being filed against this intellectual property rights. As a result, the Czech government is now raising the issue with the intention that it is impossible to sign a contract with KHNP, saying that this original technology belongs to itself. So these parts are becoming a problem. Next is the so-called Great Whale Project, which is related to the gas field off the coast of Yeongil Bay, Pohang, which is likely to continue to be debated over the economic part, the reserve evaluation, the background of the selection of the Ect Map by companies, and the success rate of drilling.

[Anchor]
I see. I'll also look at the New York Stock Exchange this week, and although there was a negative impact due to the current war crisis between Israel and Iran, it seems that they hit a cover due to the solid job security.

[Seo Eun-sook]
The employment index came out much better than expected last weekend. That's why we covered the geopolitical risks of the Middle East, as the number of people increased by 254,000 compared to the previous month, which led to a sharp rise in market expectations. That's why the New York Stock Exchange closed very strongly. In fact, prices are showing a stable trend and employment is very high, so I think the U.S. stock market will continue to be very strong because of the relief that the U.S. economy is going very solidly.

[Anchor]
Also, the U.S. price index will be released this week, so how will this affect investment sentiment?

[Seo Eun-sook]
This is the consumer price index and the producer price index from the 7th to the 11th, so it will be released this week. However, in fact, the inflation rate in the U.S. is showing a steady slowdown. Therefore, there are many opinions that additional big cuts are not needed because prices are stable and employment indicators are better than expected. The problem is the Middle East issue. So if Israel actually attacks Iranian oil facilities in a situation where tensions between Israel and Iran are growing, there could be a huge increase in crude oil prices. So I think this could be an issue that could affect inflation again. Next, the market wants a lot about future interest rate cuts, but the FOMC minutes will be released in the middle of this week in September. So I think we can predict the future direction of interest rates through the contents. Another important thing is the 7th, today. In September, the only member of the Federal Open Market Committee who opposed the big cut was Federal Reserve Board member Michelle Boman. This director's speech is scheduled. So at this time, the market seems to be interested in how the market talks as a whole. Companies are performing, and in fact, these parts are not likely to have a significant impact on changing stock prices because most of them are reflected in the market in advance unless they are very good with surprise performance.

[Anchor]
A soft landing is expected, but depending on what action Israel takes, there will be a huge impact. So far, I have been with Seo Eun-sook, a professor of economics and finance at Sangmyung University. Thank you for talking with me today.