South Korea

Yonhap | English | News | June 17, 2025 | UndeterminedEconomic Growth

Acting Finance Minister Lee Hyoung-il emphasized the critical role of the finance ministry in guiding the new administration's economic policy and aiding recovery efforts during an extended meeting with senior officials on June 16, 2025. He underscored the urgency of leveraging the ministry's expertise and execution capability to address ongoing challenges, including declining domestic demand, a global trade war, and escalating tensions in the Middle East.

Lee called for renewed determination among ministry staff, highlighting the current economic environment's seriousness. The meeting included discussions on key policies, such as the proposed supplementary budget aimed at revitalizing the economy, ensuring price stability, and addressing issues in the real estate market. Additionally, he stressed the importance of monitoring and crisis management in light of increasing military tensions in the region, particularly following Israel's recent preemptive strike on Iran.

Korea Herald | English | News | June 17, 2025 | North Korea

Owners of South Korean firms with operations in the Kaesong Industrial Complex are expressing renewed optimism for the revival of inter-Korean economic projects following the election of President Lee Jae-myung, a candidate known for advocating warmer relations with North Korea. This sentiment emerges from the possibility of reopening the joint economic zone, which has been closed since February 2016 due to heightened military tensions following North Korea's nuclear tests. Many business owners are eager to return to the complex to either resume operations or reclaim assets left behind.

Former chairman of the Kaesong Industrial Complex Business Association, Shin Han-yong, shared that while entrepreneurs have felt disappointed in the past, they are hopeful about the new administration’s commitments to restoring dialogue with North Korea. The closures have had devastating financial consequences for many companies, with some suffering significant losses due to their operations being largely concentrated in Kaesong. The South Korean government provided limited compensation to affected businesses, leaving many in a precarious financial state.

The encouragement from business leaders like Kim Ki-moon of the Korea Federation of Small and Medium Enterprises underscores a collective hope for renewed inter-Korean economic cooperation. Stocks related to inter-Korean business interests have seen noticeable surges following positive developments in communication between the two Koreas, although some experts remain skeptical about the prospects for a genuine revival of cooperation. This skepticism stems from concerns over North Korea's advancing nuclear program and its current disinterest in engaging with South Korea on economic matters, suggesting that the obstacles to restarting these projects may be substantial.

Joongang Ilbo | English | News | June 17, 2025 | UndeterminedReal Estate

Seoul city government is set to implement increased oversight on real estate transactions conducted by foreign buyers, responding to rising foreign ownership and concerns over market imbalance. Announced on June 15, 2025, the new measures aim to enhance scrutiny of funding sources in foreign property deals and expand investigations into irregular transactions identified by the Ministry of Land, Infrastructure and Transport. Inspections will be conducted to ensure that foreign buyers comply with residency requirements in land transaction permit zones.

This initiative is seen as one of the most significant actions by a Korean municipality to impose greater regulation on a housing market segment that has previously faced few restrictions. There is growing discontent among Korean residents facing stringent lending rules and inflated housing prices, while foreign buyers, particularly those obtaining financing overseas, are perceived to navigate the market with fewer regulatory constraints.

As of late 2024, the foreign ownership figures have highlighted a pressing issue: 98,581 foreign owners held 100,216 homes, including approximately 23,700 in Seoul, and they owned over 66,199 acres of land. The city's measures are part of a broader international effort to regulate foreign investment in real estate, citing examples like Australia, which recently banned foreign purchases of existing homes to tackle housing affordability concerns.

The upcoming policy will involve monthly data collection on transactions from district offices and improved coordination with the Land Ministry to investigate financial documentation submitted by foreign buyers. Violations of residency or usage agreements could lead to correction orders, with fines of up to 10 percent of the property's acquisition price for non-compliance. Mayor Oh Se-hoon has signaled that the city will respond to abnormal price increases associated with foreign purchasing activity and has requested changes to national laws governing foreign property acquisitions.