The Korean real estate market has represented a relatively risk-averse and traditional means of wealth creation for everyday Korean domestic and non-domestic global investors. As evidence, real estate property prices in Korea have increased an average of 22.39% from 1990 to 2004.

The Republic of Korea has received much scrutiny from academics and practitioners since the 1997 Asian financial crisis. Specifically, Korea's economic woes during the crisis were widely attributed to the country's state-dominated economic policies and crony capitalistic behavior, often being referred to as "Korea, Inc." Since 1997, however, the Korean government has taken purposeful steps towards liberalizing its economy and giving greater attention to issues of transparency, restructuring of the large Korean conglomerates (known as chaebol), and giving greater deference to free-market principles.

In May 2003, however, the Korean government abruptly reversed course on its policy perspective, switching from a more laissez-faire to a more hands-on market approach. Such a policy reversal relating to real estate investment markets came in the form of three legislative announcements in 2003, to be put into effect in early 2005 (collectively, the "Anti-Speculation Laws"). In short, the Anti-Speculation Laws' objective is to curb real estate investment speculation in the Korean real estate markets by significantly increasing tax burdens on most property owners.

Regarding the new policy approach, several threshold issues arise. First, whether the Korean government, in addition to the traditional public sector tasks of passing traditional legislation relating to such things as crime, education, and labor issues, should also play the market-altering role of omnipresent capital markets commentator and personal investment advisor in the private sector to all its citizens? Second, even if the government decides that hands-on economic policies should dictate, whether the Anti-Speculation Laws are specific enough and narrowly tailored such as to impact only those short-term investors in the designated portions of the real estate markets, per the government's stated objective?

When the Anti-Speculation Laws become law, a clear signal will ring throughout the Korean and global markets that a return to crony capitalism may once again re-emerge in the Korean peninsula, on a scale not seen since before the 1997 Korean financial crisis.