In 1984, the economic magazine'The Economist' conducted an interesting experiment. They surveyed the question, "What will the economic situation be like in 10 years?" The grand prizes consisted of four groups: former finance ministers, presidents of multinational corporations, economics students at Oxford University in the UK, and the Environmental Cleaners. And 10 years later, we compared how well each group's prospects were correct. The results were interesting. The first place was jointly won by the chairman of a multinational corporation and the Environmental Beautification Agency. Oxford University's economics students weren't far behind this, and the ‘glory last’ was for the former finance minister.

There are actually quite a few experiments that show the difficulty of predicting the economic situation. On January 1st, what will happen to the US and UK stock markets in exactly one year? An economist and a chimpanzee have a prediction confrontation (?). Economists used formulas, and chimpanzees threw darts to make predictions. The result ended mostly with a chimpanzee victory. Economists also confronted the grandmothers, and again, the victory was the grandmothers. There are many more cases in which experts' economic predictions are wrong. (※ Refer to ARMSTRONG, J. Scott. The seer-sucker theory: The value of experts in forecasting. Technology Review , 1980, 16-24.)

The reason it is difficult to predict future economic phenomena is that the economy belongs to the so-called'complex world'. It is difficult to predict because the elements of the system are closely and strongly influenced by each other. In short, there are too many variables that are difficult to predict. In fact, no expert predicted a breakthrough variable called'Corona 19' that we are experiencing right now.

● Can the government's housing supply expansion plan be successful?


Looking at the plan to expand the supply of housing in the metropolitan area announced by the government on the 4th, as a reporter entering the Ministry of Land, Infrastructure and Transport, I was reminded of the aforementioned economic prediction experiments. Will the housing supply go smoothly as the government predicts and will the housing market stabilize? As you might expect, it is still in the'unknown world'.

Basically, housing is not something that can be directly made and placed in stores like industrial products, and consumers with different ages, regions, and economic conditions, and expected returns of companies that will be involved in supplying them, interest rates, loans, taxes, etc. There are many factors to consider in order for the housing supply policy to be successful, from the financial system and educational systems such as university entrance exams to public health variables such as Corona 19.

As such, the market immediately raises questions about the feasibility of this plan to expand housing supply. And the core of that question is'public reconstruction' . The government unveiled its blueprint to provide housing equivalent to 50-70% of the increased floor area ratio to homeless people, newlyweds, and young people, instead of giving incentives such as easing the floor area ratio to 500% through public reconstruction. The prerequisite in this proposal is the agreement of the reconstruction associations, and there are concerns about how many unions will respond to the government proposal.

In fact, an official from a reconstruction association said, "As the number of households increases, the population density increases, causing problems due to changes in education, transportation, and living conditions. In addition, it is more difficult to accept if the rate of donations is increased." In addition, Seoul Metropolitan Government is known to have a cautious opinion in expanding the floor limit due to concerns about side effects such as damage to the urban landscape and overcrowding in the city center. Even some of the ruling party lawmakers expressed their opposition, saying, "The public opinion in the district was not reflected." There seems to be not a lot of homework to be solved by the government yet.


●'Tragedy' caused by a shortage of housing supply

Nevertheless, many positive reviews were given to the intention of stabilizing house prices by increasing supply to the maximum . Hanyang University professor Lee Chang-moo (city and real estate economics laboratory) said, "This time, the government, not the housing consumer, was so-called'spirituality (attracting the soul).' It will take a long time for the actual effect, but at least the market's supply is insufficient. It will help to calm down psychological anxiety.”

It is clear why housing supply is so important. According to the laws of supply and demand, there are many people who want to buy, but when things are scarce, the price of a house rises. There are places that dramatically show what these side effects look like when they intensify. It is'Hong Kong'. Hong Kong's'killer home prices' are notorious globally, beyond Asia. According to official statistics released by the Hong Kong government, the average house price is 100 million won per 3.3 ㎡, and the average transaction amount of luxury homes (over 130 ㎡) in major regions is 6.9 million dollars, and our money reaches 8.2 billion won. .


In the Global Real Estate Bubble Index (GREBI) released by Swiss financial group UBS in September 2018, Hong Kong recorded 2.03, the only one out of the 20 cities surveyed, surpassing 2.0, ranking the highest. If the index is higher than 1.5, the bubble risk (risk), 0.5 to 1.5 are classified as high, -0.5 to 0.5 are classified as moderate, and -1.5 to -0.5 are classified as undervalued, so you can guess how abnormal the house price bubble in Hong Kong is. . Munich in Germany (1.99), Toronto in Canada (1.95), Vancouver (1.92), Amsterdam in the Netherlands (1.65), and London in the UK (1.61), which are famous for their high home prices, also fell short of Hong Kong's notoriety. As such, home prices in Hong Kong are difficult to afford.

There are many reasons why Hong Kong home prices have risen to abnormal levels, but the biggest factor is'chronic shortage of supply'. Park Jun-seok, a senior researcher at the Consulate General of Hong Kong of the Ministry of Foreign Affairs, said in a research report at the KDI Korea Development Institute last year, "Hong Kong basically lacks the land that can be built. The area is 1,106 ㎢, which is 1.8 times that of Seoul, but the percentage of available land is the total. In addition, the Hong Kong government has been passively responding to supply problems since the return of sovereignty (1997), which has deteriorated the housing situation .”

“The Hong Kong government planned to supply a total of 480,000 units including 190,000 private housing units to the market in the 2000s, but the actual supply until the first half of 2017 was only 60% of the plan. Due to such environmental and policy issues, The chronic shortage of supply eventually led to higher housing prices.”

Park Senior Researcher "I've been working in Hong Kong and met local government officials, to politicians, academics, businessmen ask about what is the biggest problem of the Hong Kong real estate market, and each is short-lived those answers. " Gongbul Polo (供不需求)', that is, that supply did not keep up with demand in time. This includes the negative attitude of the Hong Kong government . "

● The'butterfly effect' caused by the shortage of housing supply A

bigger problem is that the negative impact of real estate policy is not just a housing problem. Since the 2000s, there has been a huge gap between high housing prices and average workers' income in Hong Kong. For this reason, it is no longer possible to solve the problem with individual abilities in the middle class and below. This means that ordinary office workers have become unable to buy a home on salary income alone. Even if you apply for a mortgage loan from the financial sector, the repayment burden is so great that it leads to another problem that offsets other spending power. So, in conclusion, for Hong Kongers, buying a home has become a subject that is determined not by their own abilities, but by their'parents' wealth.

In fact, the median wage announced by the Hong Kong Statistical Office in 2018 is HK$17,500 (approximately 2.7 million won), and the salary level of first-year students graduating from a four-year college is HK$10,000 to 13,000 (approximately 150 ~ 2 million won), the legal minimum wage is 37.5 Hong Kong dollars per hour (about 5,700 won, as of May 2019). There is a big gap between the Hong Kong housing price and the real income of wage workers. South China Morning Post, a leading Hong Kong press, said, "The average apartment price in Hong Kong is 18.1 times the average annual salary of a waged worker. General office workers need to spend less than a penny and collect nearly 20 years before they can get a 10 pyeong house." Delivered.

Park Senior Researcher "housing situation so I'm serious, Hong Kong In place also able to laugh at situations that savings Silverton Indefinitely marriage period or lived away from home for each parent a certain period of time after marriage. This phenomenon is crucial to the social whole young It acts as a factor that lowers the level of motivation for work. Eventually, it has a negative impact on marriage issues and fertility rates and lowers the vitality of society to a level where it is difficult to recover .”

In addition, "Hong Kong youths who could not withstand the murderous housing prices are emerging to immigrate to Taiwan, etc., which are relatively inexpensive while being in the same Chinese character culture, or express dissatisfaction with the government that neglected housing shortages in a radical way. " Added.

● Late Awakening and Teachers on the Other

Side When the situation became so serious, the Hong Kong government's Carrie Lam administration, launched in July 2017, defined abnormal housing prices as a serious social problem. Although it was late, it promised to supply a total of 460,000 new homes over the next 10 years. In addition, a research service was initiated to provide additional public housing by expanding the landfill site and utilizing the redevelopment site and the idle area around the port facilities.

Senior Researcher Park said, "It may be difficult to directly compare the case of the real estate market that occurred in the Hong Kong economy with a population of 7.4 million and a GDP of 360 billion dollars with the situation in Korea, which is about 7 times larger in population and 5 times larger in economy. But, at least , it seems necessary to try to find a point that should be avoided in policy by taking the case of a painful real estate policy failure of the Hong Kong government as a teacher .”

From this point of view, we need to take seriously the reality that the average price per 3.3㎡ of apartment in Seoul has risen 54.7% from 17.31 million won in May 2017 to 26.68 million won in July this year (status from the Korea Appraisal Board). There is. This is because most young people are less likely to buy a house with the income they earn even if they have a difficult job through the'job war'. In such a situation, giving up marriage and childbirth, gathering souls and selling apartments, is extremely common sense and reasonable judgment as an economic agent. Who can blame them?


● When demonstrating the'capacity' to break through an uncertain future

As mentioned above, it is difficult to predict the future economic situation even if armed with dozens of methodologies and various data. It's close to impossible to be precise. This is also the reason it is difficult to conclude that the government's housing supply plan will be successful. So the rosy confidence and anticipation of "I have confidence in the real estate problem" and "The real estate market is stabilizing" can be dangerous.

The'Iridium Project', which attempted to connect the world through a single communication network, shot 66 satellites at a cost of 3.5 trillion won, but ultimately failed. Technically, it was close to perfection, but it did not predict the emergence of inexpensive and convenient mobile phone overseas roaming services. When it was first launched in 2001,'Segway', a single-person electric vehicle, attracted attention as a revolutionary technology that solves the problem of commuting to and from the city, but it is disappearing as a road behind history.

After all, what we need now is not a convincing prophecy. Rather, it seems necessary to have a humble mindset that considers contingency and dynamics and responds to changes in a timely manner. In any case, there will be no disagreement that you have to solve your homework assignment. And even though there were twists and turns, I also took the'first step' anyway. The only thing left to do is to wisely and wisely resolve the adversity that will come, and to turn an uncertain future into a stable reality. Now, I look forward to the government's'performance'. Because the housing problem is not just a matter of living, it is a matter of survival for all of us.

※ In the course of the interview, I referred to Joon-Seok Park's research report and advice from Senior Researcher at the Consulate-General of Hong Kong in the Ministry of Foreign Affairs,'The Future Will Never Come (How Science and Technology Monopolize the Future , Chihyeong Jeon and Sungwook Hong)'.