For Lee Jung-ha, a 31-year-old fashion merchandiser and mother of a newborn, buying an apartment remains an unaffordable dream. In her leafy Seoul suburb, her rental apartment carries a purchase price of Won1.9bn ($1.4mn), 30 per cent higher than two years ago, driven in part by AI wealth percolating through South Korean society. Seoul, home to half of Korea's 51mn people, is the world's third most expensive property market, trailing only Hong Kong and Zurich, according to Deutsche Bank. Prices have more than doubled over the past decade to $25,545 per square metre in the city centre.

President Lee Jae Myung has warned the property sector is a "ticking bomb" that could trap the Korean economy in decades of stagnation and worsen inequality. With apartment prices in the capital rising 14 per cent during his first year in office, he faces pressure to fulfil campaign pledges to deliver affordable housing. An extraordinary boom in artificial intelligence has lifted the fortunes of semiconductor workers and property prices near Samsung and SK Hynix plants in the greater Seoul area.

The government introduced tighter caps on mortgage loans in October, restraining young purchasers' power. Last month, it doubled its ceiling on household debt growth to around 3 per cent this year to support home purchases, but many argue this is not enough. Authorities also announced plans for more than 230,000 additional homes in the Seoul metropolitan area, on top of an existing plan to build 1.35mn homes in the region by 2030. Lee's approval rating has fallen to 40 per cent, with just 25 per cent among Koreans in their twenties. "The biggest factor in his falling popularity is real estate," said politics professor Shin Yul.

Targeting the other end of the housing market, Lee's administration has unveiled plans to raise holding taxes on people who own multiple expensive properties and to scrap benefits for non-residents.