That is why pundits worry the dire warnings by policy makers on the matter in themselves pose a danger to the economy. Thursday saw more of such remarks in the vein of presidential economic policy adviser Chung Moon-Soo’s warning on May 4 that “the time has come” to worry about a real estate bubble.

“When we look at apartment prices in the affluent Gangnam area” south of the Han River in Seoul, “they are almost as high as those in Japan just before the real estate bubble there burst, and they have certainly reached a point where they cannot be regarded as normal,” Finance Minister Han Duck-soo told reporters Thursday. “Apartment prices in three Gangnam areas have increased to some 18.9 times the annual average income a worker earns, very close to the 21.7 times mark where Japan’s real estate bubble burst at the end of 90s.”

Experts admit that there are signs of a property bubble, but they say it is unhelpful for the government to keep harping on it in a way that looks designed to pierce the bubble by worrying the market. Instead, the government should seek to deflate it in a safe way, they urge.

Bae Sang-geun, a researcher with the Korea Economic Research Institute (KERI), warns of a “serious blow to our economy” if the government approaches the matter by trying to burst the bubble rather than solving the problem with the principles of demand and supply, especially given a situation where “many economic factors are working against the national economy.”

The business results of 552 listed firms which closed their books at the end of December on Thursday showed that their operating profit fell on average 8.3 percent to W12.5 trillion (US$12.5 billion) and net income 5.2 percent to W12.3 trillion, indicating that high oil prices and the appreciating won had a dramatic impact on their profitability.

(englishnews@chosun.com )