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Lee's six-day state visit abroad sees success, but issues still exist at home

Published: 26 Apr. 2026, 19:33 Updated: 26 Apr. 2026, 19:46

President Lee Jae Myung and First Lady Kim Hea Kyung arrive at Seoul Air Base on April 24 after completing their state visits to India and Vietnam. [JOINT PRESS CORPS]

President Lee Jae Myung, back from a six-day state visit that delivered economic gains abroad, is now facing mounting challenges at home, including a tightening housing market and rising uncertainty over global energy supplies.

Among the most pressing is a tightening jeonse (lump-sum deposit) market, as a looming tax change threatens to further constrain housing supply.

With the suspension of heavy capital gains taxes on multi-home owners set to expire on May 9, the supply of jeonse listings in Seoul is shrinking. Seoul’s apartment jeonse supply-demand index for the third week, as of April 20, rose to 108.4 — the highest level in about four years and 10 months since late June 2021, when it reached 110.6, according to the Korea Real Estate Board. A reading above 100 indicates demand outstripping supply.

The issue of reforming the long-term holding tax deduction on capital gains — first raised by Lee — has become a political flashpoint ahead of the June 3 local elections.

While the Democratic Party (DP) leadership has tried to calm concerns, saying it has “never considered abolishing the deduction for single-home owners,” incumbent Seoul mayor Oh Se-hoon, the main opposition People Power Party’s candidate, has repeatedly pressed Chong Won-o, the DP's Seoul mayoral candidate, to clarify his “exact position on abolishing the deduction.”

People overlook buildings in Seoul. [YONHAP]

Lee has pushed back against the criticism. "Some opposition parties introduced a bill to limit the long-term holding deduction, which has nothing to do with the government, yet they are distorting it as if it were a bill put forward by the president," he posted on X on Friday.

The president did, however, signal the need for reform, writing that while "a capital gains tax reduction for the period of actual residency is necessary to protect single-home owners, cutting capital gains tax on high-value properties simply because someone held them for a long time without living in them is not a residential protection policy — it is a policy that encourages housing speculation."

Some within the ruling camp expect the government's tax reform plan, due to be submitted in late July after the local elections, to include measures to strengthen property holding taxes and scale back the long-term holding deduction.

Lee is also facing pressure from the protracting Middle East tensions.

With a second round of U.S.-Iran ceasefire negotiations falling through, the government earlier this month said it is moving to diversify its energy supply chain by rerouting crude oil imports from Saudi Arabia and the United Arab Emirates away from the Strait of Hormuz. Imports via alternative routes are projected to reach 39.99 million barrels next month, significantly higher than the 30.03 million barrels shipped through the strait last month.

“This is the result of close coordination between the government and the private sector to respond swiftly,” Presidential Chief of Staff Kang Hoon-sik said.

An employee refuels a vehicle at a gas station in Seoul on April 24 [YONHAP]

Despite these efforts, persistently high global oil and raw material prices remain a concern. The government has frozen the fourth round of maximum gasoline supply prices, effective Sunday, at 1,934 won per liter ($4.96 per gallon) for gas, maintaining levels set in earlier rounds. The national average gas price, however, continued to rise, reaching 2,007.79 won per liter on Sunday.

Domestic naphtha reserves are also under pressure, currently covering only about one month of supply. Additional relief is expected once 2.1 million tonnes (2.3 million tons) — equivalent to roughly three months’ supply secured through recent special envoy efforts — are safely brought into the country.

A reshuffle within the presidential office is increasingly likely as key aides are being considered for parliamentary by-elections set to coincide with the upcoming local elections.

Ha Jung-woo, senior secretary to the president for AI and future planning, and spokesperson of the Blue House Jeon Eun-su are facing mounting calls from the DP to run. Under election law, both would need to step down by May 4 to be eligible, leaving them little time to decide whether to enter the race.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY OH HYUN-SEOK [[email protected]]