Lee warns South Korea could face Japan-style property slump

According to CNBC, South Korean President Lee Jae Myung warned that the country could endure a Japan-style long slump if its overheated housing market is not stabilized, as his government prepares to revise taxes aimed at the sector. Lee said real estate makes up the largest share of household wealth in South Korea, where real assets accounted for 75.8% of household assets at end-March 2025 versus 24.2% for financial assets. He also said Tokyo’s housing market burst like a balloon in the early 1990s and noted that some people fear South Korea could face Japan’s lost decades. Lee’s comments came as he seeks to shift household wealth away from property and toward financial markets. The Kospi briefly crossed 5,000 in January 2026 after Lee, then a presidential candidate, reportedly pledged to reach that level during his term. Economists told CNBC that the Japan comparison overstates the immediate risk, citing tight mortgage lending rules, a household debt-to-GDP ratio of 90.14 in 2024, and limited signs of a broad property bubble beyond Seoul.