1. What do you think about the house poor problem in the future?

    There is a consensus among many economists that housing prices will continue to decrease. The problem is the speed of the decrease and a lot of people predict that this decrease will be accelerated. Especially when the supply is flexible as it is in real estate, there is a strong possibility that the market's expectation will be strongly reflected in the price. Therefore, I think that the house poor problem will be exacerbated unless the people who bought the house at a high price through many loans do not cut their losses through transaction in the near future.

2. What is the main cause of the house poor problem? Is it Individual greed or the government that caused this situation? 

    The prime responsibility for the house poor problem is the individual because the final decision of buying house is a personal judgment. However, the government's policy brought a wide fluctuation of the market and the failure of the tax system and financing instigated individual speculation and demand. Therefore the government also has to take considerable blame for this problem.

3. What do you think about relief for the house poor? 

    At present, the government is trying to solve the house poor problem by housing transaction improvement, extension of transfer tax reduction and so on. However, fundamental market principles cannot be changed into short-term policy instruments. Therefore, we have co accept the long-term decrease of housing prices and use policies that control its speed, rather than using short-term measures. The government in office is giving excessive preference to construction and civil engineering business, and this prevents stable prices. A sharp drop in prices is aggravated by this.

4. What is the best solution for the house poor problem?

    The government has to announce a long-term decrease of housing prices to market participants including the house poor and must make a new Policy that stabilizes housing price downward. The reason why the house poor do not transact to cut their losses and stick it out is that they look forward to an increase in housing prices. This can become the cause of a sharp drop in price. The loss will only get bigger. The government's policy has to stop this false expectation through accurate market information. However, I am worried that the current government policy is going in the complete opposite direction.

By Ahn Na-ri CP Reporter 
ahn-nari@cnu.ac.kr