[비즈한국] Since the change in administration, the direction of real estate policy seems, at first glance, to have shifted toward a market-friendly stance. The new government is prioritizing "deregulation" and "expanding supply," but embedded within this is a sophisticated "switch-style" strategy designed to include mechanisms for suppressing speculation while encouraging genuine demand.
For example, while maintaining stringent loan regulations, the government is attempting to balance supply and demand by gradually implementing the revitalization of redevelopment projects and tax relief in parallel. If housing prices become overheated, there is a high probability that region-specific regulations (such as re-designating regulated areas and strengthening resale restrictions) will be activated.
Regarding taxes, the government has reaffirmed its stance that it "will not control housing prices through taxation," and additional hikes on holding taxes or capital gains tax surcharges remain on hold. Instead, measures to revitalize transactions are being prioritized; notable examples include the deferral of capital gains tax surcharges (until May 2026), the increase in special exemptions for single-home owners in provincial areas (from 300 million to 400 million won), and the easing of comprehensive real estate tax surcharges for multi-home owners.
On the other hand, financial regulations are being further tightened. According to the June 27, 2024, household debt management plan, the limit for mortgage loans in the capital region and regulated areas has been capped at 600 million won regardless of income or housing price, and loans for "gap investment" have been effectively blocked.
Furthermore, the "3rd stage Stress DSR (Debt Service Ratio)" introduced in July 2025 will extend the 40% DSR regulation to borrowers with loans exceeding 100 million won and apply a +1.5% stress interest rate, further limiting borrowing capacity. Consequently, the government is employing a "tax easing - leverage blocking" model, loosening the tax side while tightening the financial side.
Revitalizing maintenance and redevelopment projects is a core strategy to resolve supply-side issues. To bridge the supply gap—highlighted by delays in the 3rd new city construction (only 6.3% of the total volume has commenced) and a sharp drop in Seoul apartment move-ins in 2026 (-32.9%)—the government appears to be pursuing a "speed-first" approach for urban redevelopment alongside the expansion of purchase-lease housing (110,000 units planned). This trend signifies a structural shift toward a supply-led policy.
The government has extended the exclusion of capital gains tax surcharges for another year until May 2026, and is reviewing whether to make this permanent thereafter. Regarding acquisition and holding taxes, the expansion of special exemptions for provincial single-home owners and the easing of acquisition tax surcharges for multi-home owners have been brought up for discussion in the National Assembly.
While the possibility of abolishing the comprehensive real estate tax has been mentioned, the government is approaching the proposal for a full exemption for single-home owners with caution, due to concerns over "market lock-in" and equity issues. Taken together, the tax policy is expected to move in the direction of "easing transaction taxes → increasing liquidity → stabilizing prices."
The supply cliff and falling interest rates are highly likely to stimulate a "scarcity premium." In particular, there is a shortage of listings in areas expected to undergo redevelopment, centered around Gangnam and the Hangang Belt, which is interpreted as a precursor to localized price hikes. In response, the government is preparing restorative regulations that function like a pendulum.
Specifically, this includes re-designating speculative zones and land transaction permit zones, flexibly adjusting resale restrictions and mandatory residency periods, and re-tightening DSR and mortgage loan limits while reducing guarantee ratios. The government is deploying a strategy to adjust market sentiment by periodically flipping these "switches."
Over the next 2 to 3 years, the real estate market will likely remain in a state that is neither fully deregulated nor fully controlled. The new government is adopting a dual strategy: easing taxes and regulations while tightening finance, and allowing market autonomy while suppressing leveraged speculation.
Starting when the 2026 supply cliff becomes a reality, the policy of increasing supply through redevelopment will create upward pressure on prices. In response, the "pendulum restoration" of reactivating loan and transaction regulations will likely repeat. Therefore, the real estate market over the next 2 to 3 years will enter a phase where the "switch" operates fluidly according to supply, demand, and policy signals, rather than following a consistent, unidirectional path.
From a market monitoring perspective, the notable trends are as follows: If a base interest rate cut is implemented, it could disrupt scheduled supply volumes, which in turn could lead to a rebound in housing transaction volumes in Seoul. This increase in transaction volume acts as a leading indicator for price hikes; consequently, the government's regulatory switch may be activated with a time lag of about 3 to 6 months. Furthermore, volatility in prices is expected to expand after the second quarter of 2026, when guidelines regarding redevelopment contributions and floor area ratios are finalized.
Now, genuine buyers, investors, and policymakers must all understand this "variability" and refine their respective strategies. Genuine buyers must carefully assess their repayment capacity for existing mortgage loans considering the higher barriers to borrowing, and it is essential to plan funds within a 40% DSR limit. To reduce the supply time lag, policymakers should more actively provide intermediate supply mechanisms, such as expanding the scope of pre-construction sales permits and allowing private participation in public REITs.
The government is likely to respond to rising housing prices by combining five policy tools. The first is expanding the designation of "adjustment target areas" and "speculative zones." The likelihood of re-designating areas—centered around the recently skyrocketing Hangang Belt, areas benefiting from GTX developments, and the first-generation new cities—as adjustment target areas and speculative zones is very high. Following the re-designation of the Gangnam-3 districts and all of Yongsan as land transaction permit zones in March 2025, a "balloon effect" occurred where demand shifted to non-Gangnam areas such as Mapo-gu, Seongdong-gu, and Gwangjin-gu. The government has officially hinted that it could swiftly introduce regulations in these non-regulated areas within 3 to 6 months after the general election, which is interpreted as a clear signal to market participants.
The second is strengthening resale restrictions and residency requirements. The resale restriction period for new apartment complexes within speculative zones could be extended to a maximum of 10 years. At the same time, mandatory residency requirements are expected to be strengthened. By imposing fines or enforcement penalties on buyers who fail to meet residency requirements even after the lifting of land transaction permit zones or speculative zone designations, the entry barrier for non-cash demand driven purely by investment purposes could be significantly raised.
Third, there is the expansion of measures to curb loans and liquidity. Following the household debt regulations announced on June 27, the mortgage loan limit for the capital region was capped at 600 million won, and loans for multi-home owners and gap investment purposes were effectively blocked entirely. Additionally, for project financing (PF) loans, initial cash flow is being restricted through stronger feasibility evaluations and reporting obligations, and roll-overs or DSR readjustments that induce "last-minute" demand are being considered as targets for precision regulation.
Fourth, intensified transaction tracking and crackdowns on price fixing are expected. As the government expresses its will to strengthen investigation systems immediately upon reporting actual transaction prices and expand crackdowns to uncover "down-contracts" or false transactions, intensive surveillance is also planned for acts that distort market order, such as price fixing in specific regions or collective asking price manipulation via YouTube or Naver cafes.
Finally, we can look at the "switch strategy" of tailored regulation and easing. The government appears likely to adhere to a so-called "switch strategy"—quickly reintroducing regulations in areas where housing price hikes show signs of overheating, while simultaneously providing loan relief and supply incentives in areas where unsold inventory is increasing or the market is stagnant. This strategy is interpreted as a measure to enhance policy flexibility by region while striving for overall market balance.
If such loan and transaction regulations are strengthened, the short-term surge may calm down. However, regulations on multi-home owners remain in place in Seoul and core capital areas, and there remains a significant time lag before new supply begins in earnest. Therefore, it is highly likely that a "transaction lock-in phenomenon"—characterized by shrinking transactions, defensive asking prices, and deepened premiums—will recur.
Furthermore, because the government's regulation-easing switch can trigger a balloon effect between regions, investors must closely examine complex variables such as various regulatory calendars (designation and lifting dates), financing risks, and requirements for resale and residency.
In such a situation, a strategy of flexibly responding to policy changes is essential. The new government is highly likely to swiftly implement the expansion of adjustment target areas and speculative zones, strengthen resale restrictions and residency requirements, tighten loan and liquidity regulations, and intensify transaction tracking and price-fixing crackdowns to curb short-term price spikes. However, these measures should not be understood as fixed regulations, but as part of a "variable strategy" that changes fluidly according to market conditions.
Therefore, both genuine residents and investors are at a point where they must establish strategies to respond nimbly while closely observing the direction and timing of policy shifts.
Kim Hak-ryeol, head of the Smart Tube Real Estate Research Institute, known by his pen name "Pasyong," previously served as the team leader of the Real Estate Research Division at Gallup Korea. He manages and hosts the Naver blog "Pasyong’s World Exploration" and the YouTube channel "Stew TV." He is the author of books including "Re-writing the Republic of Korea Real Estate User Manual (2025)," "The Power of Gyeonggi-do Real Estate (2024)," "The 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)," "The Future Map of South Korean Real Estate (2021)," and "From Now On, Only Places That Rise Will Rise (2020)."