[비즈한국] On June 27, 2025, the government unveiled high-intensity measures to once again shake up the real estate market. The core of the policy is to cap mortgage loans at 600 million won for homes in the metropolitan area and regulated zones, and to mandate actual occupancy (registration of residence) within 6 months for those purchasing homes using loans. The dominant assessment in the market is that these measures are aimed directly at the overheated apartment markets in the Gangnam area and the Han River Belt.
Government real estate policies always shift market trends. The essence of these measures is clear.
· First, it limits mortgage loan amounts to 600 million won in the metropolitan area and regulated zones.
· Second, it requires actual occupancy within 6 months if a home is purchased with a loan.
These two measures go beyond the intention of simply reducing the total amount of debt; they target speculative demand in the high-priced apartment markets of Gangnam and the Han River Belt, which have led the recent surge in housing prices. In fact, a significant portion of apartment purchases in the Gangnam area stemmed from "upgrading" to better locations, gap investments, and "one smart house" strategies that actively utilized loans. Through these measures, the government aims to fundamentally block such demand.
The three districts of Gangnam and the Han River Belt (Mapo, Yongsan, Seongdong, etc.) have seen record-high prices over the past few years. While some say that "only the cash-rich buy houses," in reality, there was significant demand from those aggressively using loans to upgrade to higher-end neighborhoods.
With loans over 600 million won effectively blocked by these measures, transaction volume in these areas is highly likely to shrink sharply in the short term. Given that higher-priced apartments have a higher reliance on loans, they are bound to be directly affected by the regulations. Even for genuine homebuyers, it is necessary to refrain from reckless "chasing" of purchases and instead adopt a strategy of waiting for price adjustments before aiming for low-point buying.
Of course, some demand may shift to mid-to-low-priced properties in the 600 million to 800 million won range in the outskirts of Seoul or the greater metropolitan area, where purchases remain possible within the loan limit. However, because the mandatory 6-month occupancy rule also applies, speculative purchases will be inevitably limited. It is expected that a clear "balloon effect" like in the past will be difficult to see.
The important point here is that it is not merely a shift in demand to areas where loan regulations are relaxed, but rather that the mandatory occupancy and practical limitations on funding are preventing further market overheating.
As for provincial areas, they are expected to be less affected as they are excluded from this loan limitation. The government is pursuing various "warming" policies in parallel, such as relaxing capital gains taxes and relocating public enterprises, to resolve unsold housing units in the provinces.
Accordingly, the provincial real estate market is likely to follow a pattern of bottoming out while absorbing existing inventory. During this period, it is necessary to selectively pay attention to areas where supply shortages are expected—that is, places where move-in volume will decrease within the next 2 to 3 years.
While intermediate payment loans are not subject to the 600 million won limit in these measures, the 600 million won cap is applied when transitioning to a balance loan upon move-in. Those preparing for apartment pre-sales (cheongyak) could face disaster if they do not plan their financing ahead of time for the move-in phase. It is risky to aggressively pursue a pre-sale just for the sake of winning a bid. In particular, since the 6-month actual occupancy obligation is imposed, pre-sales for investment purposes are expected to become much more difficult.
The 6-month actual occupancy mandate also affects the jeonse (long-term deposit rent) and monthly rent market. Since one cannot immediately put a house up for rent after purchase, the supply of available rental properties will inevitably decrease. With apartment jeonse demand currently concentrated due to declining new supply and the aftermath of villa jeonse fraud, the instability of jeonse prices could further intensify. The shift toward monthly rent is also expected to accelerate. The government, local authorities, and market participants all need to strengthen monitoring of rental market instability.
For genuine buyers, since popular area transactions are likely to slow significantly and prices may adjust in the short term, reckless chasing of market prices should be avoided. If urgent sales appear due to the regulatory impact, a strategy of careful selection is required.
It is also essential to verify the loanable amount in advance. As the threshold for loans has risen, it is advisable to check the loanable amount with a bank before signing a housing contract. For existing homeowners looking to upgrade, it is safer to adhere to the "sell first, buy later" principle, selling the existing house before purchasing a new one. "Buying first, selling later" in popular areas requires caution, as one may face difficulties if the existing home does not sell. When applying for pre-sales or purchasing, one must carefully check detailed regulations such as loan limits for intermediate and final payments, move-in timelines, and residency obligations. In particular, one must keep in mind that the 600 million won limit applies when switching to a balance loan.
The most important factors in real estate investment are location and future value. Do not be swayed by short-term ups and downs; instead, calmly analyze data, policies, and future regional demand. In Gyeonggi-do, areas such as Gwacheon, Seongnam, Hwaseong, and Pyeongtaek—where jobs are increasing and the population is flowing in—have high future value.
Seoul remains a valid strategic location for home ownership, and the more the market falls, the more demand flocks to the safety of Seoul. It is important to invest with a focus on areas expected to see future value appreciation, such as income-generating real estate, redevelopment/reconstruction sites, and GTX development zones.
Avoid excessive leverage and establish a stable financial management strategy. Use fixed-rate loans to minimize interest rate risk and secure emergency funds to respond to unexpected market fluctuations.
These measures seem to provide a short-term "breather" effect for the overheated Seoul and metropolitan markets. The decline in buying sentiment for high-priced apartments in the three Gangnam districts and the Han River Belt will be notable. However, it may become harder for genuine homebuyers like young people and newlyweds—who lack loan capacity—to acquire homes, and market polarization may intensify as demand concentrates on mid-to-low-priced apartments. Furthermore, side effects in the rental market, such as reduced supply, price instability, and accelerated shifts to monthly rent, are also concerning. The government's additional supply measures and plans for stabilizing the rental market are urgently needed.
The June 27 measures will certainly shake up the current market. However, the real estate market has always been a succession of change and opportunity. While these measures will likely dampen transactions and lead to a period of consolidation in the short term, opportunities still exist within that landscape.
Genuine homebuyers should focus on risk management, such as cautious approaches, financial planning, and pre-verifying loan eligibility. Investors should set strategies by focusing on location, future value, and policy changes. The government should also make parallel efforts to protect genuine homebuyers, stabilize the rental market, and expand supply.
Just because the real estate market has entered a stagnation phase does not mean there are no opportunities. Recognizing that adjustment periods often provide more opportunities to secure valuable assets, one must seek survival strategies in the real estate market based on thorough analysis and strategy.
Kim Hak-ryeol, the director of Smart Tube Real Estate Research Institute, known by his pen name "Pashong," formerly served as a team leader at the Korea Gallup Real Estate Research Division. He operates the Naver blog "Pashong's World Exploration" and the YouTube channel "Stew TV." His books include "The Power of Gyeonggi Real Estate (2024)," "Absolute Principles of Seoul Real Estate (2023)," "The Future of Incheon Real Estate (2022)," "Kim Hak-ryeol's Absolute Principles of Real Estate Investment (2022)," "Future Map of South Korean Real Estate (2021)," "From Now On, Only Places That Will Rise, Rise (2020)," and "South Korea Real Estate User Manual (2020)."