[비즈한국] On April 4, 2025, the Constitutional Court of the Republic of Korea upheld the impeachment of the president, ushering in a period of major upheaval in the political landscape. The departure of the nation's highest authority through impeachment has sent shockwaves both domestically and internationally, and it is expected to have a significant impact on the real estate market, which is particularly sensitive to uncertainty.
Amidst the political turmoil, public attention is naturally focused on the early presidential election scheduled for two months later, on June 3. Both the ruling and opposition parties are preparing to elect new leaders and are ready to put forward various policy pledges to win the trust of the people.
Among these, real estate policy is highly likely to become a core pledge. This is because real estate is a field that the majority of the public experiences sensitively, and it is an issue where the interests of different generations, social classes, and regions clash most sharply.
The current real estate market is undergoing a complex flow of change. As the long-standing trend of interest rate hikes stabilizes, an increase in transaction volume and price rebounds are being observed in some regions. At the same time, due to population decline and oversupply, price declines persist, particularly in small and medium-sized provincial cities, and owning a home remains a distant dream for the younger generation and non-homeowning ordinary citizens.
Regulations have been reintroduced in areas like Gangnam, Seoul, and structural changes in the lease market are underway as the transition from long-term deposits (jeonse) to monthly rent (wolse) accelerates. In this situation, real estate pledges must not be simple populism, but should be presented as strategies to resolve current imbalances and ensure future sustainability.
First, expanding housing supply remains a crucial task. However, it must no longer be a simple increase in volume, but a supply tailored to demand and balanced regional development. To resolve the concentration of demand in the capital region, especially Seoul, infrastructure for housing, transportation, and jobs must be strengthened in major hub cities such as Busan, Daegu, Gwangju, and Daejeon. This should induce a redistribution of the population and resolve regional imbalances.
Within the capital region, it is also important to create high-quality residential environments through the redevelopment of existing city centers, such as the reconstruction of first-generation new towns and the redevelopment of aging urban areas. Furthermore, it is necessary to create a market centered on actual residents by significantly expanding public rental housing tailored to life stages, such as for young people, newlyweds, and the elderly.
Second, the reform of real estate taxation must be pursued with fairness and effectiveness in mind. The tax changes of the past few years lacked predictability and, as a result, lost public trust. Future pledges should be designed to restore tax justice while reducing the burden on actual residents. By easing the comprehensive real estate tax for single-home owners, reducing acquisition taxes for first-time home buyers, and reducing capital gains taxes for long-term owners, the burden on the middle class and actual residents can be eased, while strictly taxing multi-home owners for speculative purposes to prevent market overheating.
Third, institutional improvements for the stability of the lease market are urgent. While the system for the right to request contract renewal and the cap on monthly rent increases are important for the housing stability of tenants, unforeseen side effects have emerged during implementation. The next government must present a plan to protect the rights of both tenants and landlords in a balanced manner, reflecting the realities of the market.
For example, a method linking rent increases upon renewal to regional inflation or granting tenants priority purchase rights after living in a property for a certain period could be considered. At the same time, a rental housing policy that does not rely solely on the private market should be realized by increasing the proportion of public rental housing and improving its quality.
Fourth, expanding financial support is a key policy for restoring the housing ladder. Long-term fixed-rate, low-interest loans should be provided to young people and newlyweds, and the threshold for policy financing, such as the 'Didimdol' loan, should be lowered for non-homeowners below a certain income level. The 'basic loan' system currently under discussion is a new approach that allows every citizen to utilize low-interest funds based on a minimum level of credit. This can function as a welfare policy that helps citizens achieve economic independence beyond mere financial support.
Fifth, it is necessary to establish institutional mechanisms to increase the transparency and trust of the real estate market. Reducing information asymmetry by making actual transaction prices public more quickly and in detail, and making electronic contracts mandatory for all real estate transactions, can prevent illegal transactions and tax evasion. In addition, the Ministry of Land, Infrastructure and Transport or local governments must regularly announce key indicators of the real estate market and disclose forecasting models to the public to enhance policy credibility and ensure market stability.
Finally, urban regeneration and eco-friendly development for sustainable cities must be at the core. Reckless development aimed at short-term profit hurts urban competitiveness in the mid-to-long term and becomes a factor that lowers the quality of life for citizens. Therefore, the government should systematically support the remodeling and reconstruction of aging urban areas, and build a public-private partnership model by granting tax and financial incentives for private-led urban regeneration projects. At the same time, real estate policies that consider the environment, such as expanding green buildings with high energy efficiency, inducing the use of eco-friendly materials, and minimizing carbon emissions, will reflect the spirit of the future era.
In conclusion, the early presidential election to be held on June 3, 2025, has significance beyond a simple change of government. It is a process of forging a new social contract, and the public will react very sensitively, especially to life-oriented policies like real estate.
The ruling and opposition parties should not stop at popular pledges aimed at short-term effects, but should prepare real estate pledges with the mindset of redesigning the overall housing structure of the Republic of Korea. To improve the quality of life for the people and achieve a healthy economic circulation, it is time for an era where real estate functions as a tool for the people, rather than politics using real estate. That will be the most meaningful legacy that this presidential election can leave behind.
Kim Hak-ryul, head of the Smart Tube Real Estate Research Institute, known by the pen name 'Pashong,' previously served as the team leader of the Real Estate Research Division at Gallup Korea. He operates and hosts the Naver blog 'Pashong’s World Exploration' and the YouTube channel 'StuTV.' His books include 'The Power of Gyeonggi Real Estate (2024),' 'The Absolute Principles of Seoul Real Estate (2023),' 'The Future of Incheon Real Estate (2022),' 'Kim Hak-ryul's Absolute Principles of Real Estate Investment (2022),' 'The Future Map of Korea's Real Estate (2021),' 'From Now On, Only Places That Will Rise Will Rise (2020),' and 'The User's Manual for Korea's Real Estate (2020).'