South Korean President Lee Jae-myung’s approval rating has dropped to 37.4%, the lowest since he took office in June 2026. At the same time, Seoul home prices have surged roughly 30% over two years on the back of the artificial intelligence investment boom, making housing affordability the most daunting challenge facing a president barely more than a year into his term.
According to a survey released by South Korean pollster Realmeter on September 7, Lee’s approval rating fell to 37.4%. An earlier poll published by South Korean media on August 31 had already shown his support dropping below 40% for the first time, to 38.9%. Gallup Korea’s survey corroborated the trend, showing his approval among people in their 20s at just 25%.
Soaring home prices are seen as the primary driver of the decline. According to Deutsche Bank, Seoul is now the world’s third-most expensive housing market, behind only Hong Kong and Zurich. Over the past decade, home prices in central Seoul have more than doubled to $25,545 per square meter. With nearly half of South Korea’s roughly 51 million people living in the Seoul metropolitan area, housing price movements have an outsized impact on livelihoods.
A unique driver of this housing rally stems from the AI industry. As the global AI investment boom fuels demand for advanced memory chips, employees at South Korean semiconductor companies such as Samsung Electronics (005930.KS) and SK Hynix (000660.KS) have seen their incomes and wealth grow significantly — a wealth effect that has spilled directly into the property markets surrounding the two companies’ manufacturing facilities.
The experience of Lee Jung-ha, a 31-year-old fashion merchandise planner, encapsulates Seoul’s current housing predicament. She recently gave birth, and the apartment she rents in a Seoul suburb now sells for 1.9 billion won (approximately $1.4 million), up 30% from two years ago. “I should have gritted my teeth and bought this place when I got married two years ago,” she said.
Lee Jae-myung last month described South Korea’s real estate market as a “time bomb,” warning that if left unresolved, it could exacerbate social inequality and potentially saddle South Korea with “two or three lost decades.” He stressed the need to deploy every available tool to refine supply, tax, and financial policies to restore stability to the housing market.
But striking the right policy balance is extraordinarily difficult: curbing speculative demand while avoiding a sharp price decline. A housing crash would enrage millions of property owners, while continued price gains make it harder for young people to buy homes and settle down.
Over the past year, the South Korean government has rolled out a series of policies that pull in opposing directions. Last October, authorities further tightened mortgage lending restrictions to curb speculation, but the move also eroded the borrowing capacity of some young homebuyers. On August 13 this year, the government pivoted, announcing it would raise policy financing support for real estate development projects from the originally planned 26.3 trillion won to more than 47.8 trillion won, while offering new policy loans for young people and newlyweds purchasing their first homes, and maintaining or tightening restrictions on speculative demand.
On household debt management, the South Korean government adjusted this year’s household debt growth target from roughly 1.5% to about 3%, reflecting policymakers’ search for a new equilibrium between the property market and financial stability.
The supply side is also being ramped up. On top of the original plan to build 1.35 million homes in the Seoul metropolitan area by 2030, officials announced plans for an additional 230,000-plus residential units.
Tax policy has become the most contentious area. The Lee administration earlier introduced measures to raise holding taxes on owners of multiple properties and high-priced homes, while eliminating tax benefits for owners of a single non-owner-occupied property. The policy immediately triggered fierce backlash, with critics arguing it would force landlords to raise rents or pull rental units off the market. One owner of three apartments in an affluent Seoul district said the higher holding taxes added to her burden, while hefty capital gains taxes also reduced her willingness to sell. Facing intense public resistance, the government was forced to partially roll back the tax plan, restoring benefits for single-property owners.
Shin Yul, a political science professor at Myongji University, noted that the housing issue is a major reason for the president’s sliding approval ratings, and that a key contradiction in current housing policy lies in lending restrictions. “For young people who lack sufficient assets to buy a home, strict mortgage limits significantly constrain their purchasing power,” he said.
An overheated property market is a highly sensitive political issue for Lee and his Democratic Party of Korea. The surge in Seoul home prices is widely believed to have been a major factor in the party’s loss in the 2022 presidential election.
“Housing is one of the issues people care about most,” said political commentator Suh Bok-kyung. “With stock market volatility, high inflation, and AI-driven job uncertainty, public anxiety about the value of their assets has intensified further.”
Some citizens have grown disillusioned with the policy zigzagging. Lee Jung-ha, the new mother, said: “The government says it will stabilize the housing market in various ways, but prices just keep rising. I don’t have hope — I just keep fearing I’ll miss out.”
The deep entanglement of Seoul’s housing market with the AI industry means the South Korean government is now contending with a property market driven by global technology cycles rather than purely domestic credit cycles. This adds new complexity to policy intervention: while the semiconductor boom benefits South Korea’s exports and economic fundamentals, it is also creating new social divisions. Finding a path between AI-driven prosperity and housing equity will be one of the sternest tests of Lee Jae-myung’s remaining term.