[비즈한국] Facing the question, “How will the October 15 real estate measures affect the market?” let us pull out the threads one by one, as if untangling a complex knot. This policy is not merely an increase in the intensity of regulation, but a complex narrative in which the forces of the market and the government collide and calibrate across time and space.
1. The First Shock of New Regulations
In mid-October 2025, the government played the "triple regulation" card, targeting all of Seoul and parts of Gyeonggi-do. On top of designating adjustment target areas and speculative zones, they added the blade of land transaction permit zones. Simultaneously, the Loan-to-Value (LTV) ratio was reduced from 70% to 40%, and a portion of interest on jeonse (lump-sum housing lease) loans was included in the Debt Service Ratio (DSR). Tax provisions were also tightened, significantly increasing the burden on multi-home owners.
All these changes symbolize more than just simple adjustment. The government clearly stated, "The market is now in the domain of policy." This is a declaration that they will narrow the room for treating real estate as a freely traded or investment tool. Yet, I want to ask: if regulations are tightened, how long will the market obediently comply?
2. The Time Gap Flowing Beneath the Surface
Policies create immediate reactions. When loan thresholds rise, buyers pause. When a permit system is introduced, transactions become complex. Real estate agents hesitate to facilitate contracts, and sellers pull their properties off the market. Consequently, transaction volume plummets.
However, it is skeptical whether this sharp drop will immediately lead to a price decline. This is because housing is both a "space to live in" and a "residential asset." Those who have no reason to sell right now will not sell. There is no reason to wait for prices to drop. The market begins to catch its breath.
But time passes. As months and years go by, the initial shock of regulation creates cracks. Instability in the jeonse market emerges, and the lack of new housing supply becomes a reality. Demand seeking to evade regulations flows into the gaps, and "cash-rich" demand capable of piercing through the regulations remains. Thus, the engine for a price rebound grows.
This time gap—the time lag between policy shock and market response—is the strongest axis of the October 15 measures. While regulations may suppress the market in the short term, the logic of the market will eventually create the power to move again in the medium to long term.
3. The Halt in Transactions and the Absence of Substantial Price Adjustments
When observing the market, the first thing that catches the eye is a market without transactions. Even though real estate offices are open, there is an atmosphere as if footsteps have ceased. Both buyers and sellers have returned to a "wait-and-see" stance.
While the expression "price pullback" is often circulated during these times, reality is slightly different. Some "urgent sales" may appear, and some minor price adjustments may occur. However, these are extremely limited and localized. The entire market does not sway together because many homeowners have no reason to rush a sale, nor do they expect prices to plummet.
Instead of a price "decline," it is more natural for the market to move toward "stagnation." I want to call this a "ghost market." Transactions have vanished, but prices remain in place.
4. The Jeonse Market: Cracks Between Appearance and Reality
The space where transactions have stopped becomes clearer as the jeonse market fluctuates. Regulations make gap investing difficult. When loan criteria become stricter and residency requirements increase, the structure of buying a home with a jeonse deposit collapses. Properties begin to disappear from the market. The volume of "available" jeonse listings drops sharply.
As a result, jeonse prices rise, and the jeonse-to-purchase price ratio increases. When this ratio rises, it acts as a reconnection point for purchase prices. Some buyers turn their eyes from jeonse to ownership.
A kind of "pressure cooker" effect emerges in the jeonse market. Demand accumulated due to regulations pours into the jeonse sector, and as jeonse prices rise, it creates a rebound effect on the purchase market.
5. The Gap Between Supply Promises and Realization
The government and local authorities are issuing messages about easing supply simultaneously with regulations. Promises to speed up reconstruction, expand special floor-area ratio incentives, and accelerate completion dates are heard.
However, supply does not appear immediately. The construction chain—from redevelopment permit and design to groundbreaking and completion—is long. It spans five, seven, or sometimes ten years.
In the meantime, the designation of land transaction permit zones and tax regulations can actually trigger project delays. Some residential associations may even see room to slow down or postpone projects due to deteriorating profitability.
Ultimately, even if the government plays the supply card, the market will wait until it believes in it. As the gap between the promise of supply and its realization widens, the scarcity premium grows, and the upward pressure on prices becomes stronger.
6. Structural Polarization and the Market of the ‘Survivors’
The frightening mark this policy leaves on the market is polarization. The gap widens between regions with strong vs. weak regulations, high-priced vs. mid-to-low-priced homes, and cash holders vs. those dependent on loans.
High-end housing has some degree of shield against regulations because even if loans are difficult, some cash-rich demand exists. Conversely, mid-to-low-priced housing relies more on loans and is more sensitive to regulations. Demand for these homes is more likely to shrink.
Furthermore, businesses unable to handle the complexity and costs of regulations, and associations with unstable financial situations, are likely to be weeded out. On the other hand, well-funded, stable developers and those with assets in prime locations will maintain a competitive advantage. In the end, the market is highly likely to be reorganized around the "strong."
7. Beyond the Narrative: The Endless Tug-of-War Between Market and Policy
We are currently in a period where policy and the market are pushing and pulling each other. The government is strengthening regulations saying it will "suppress demand" to break expectations of rising prices. However, the market reacts quickly. It seeks ways to bypass or break through regulations, and as time passes, the effectiveness of regulations can weaken.
I believe this tug-of-war will become more intense. The government will issue supplementary measures, and the market will target the loopholes. Political schedules and electoral pressures will intervene as variables for policy pivots. In the meantime, market participants must carefully maintain balance. Do not overreact to short-term shocks, but do not ignore the medium-to-long-term direction either.
8. A Pullback or a Turning Point?
The October 15 measures might be a massive test paper thrown at the market. Facing the question, "Can regulation defeat the market?" we are all in the process of finding the answer.
Right now may be a time for a pullback. However, the direction has not completely reversed. As time passes, the effects of regulations will gradually soften, and the embers of a price rebound will revive. However, that rebound will not come evenly to all regions or all classes. The rise centered on prime locations, cash-rich buyers, and strong developers will become more pronounced.
If you are a market participant, I hope you remain wary of both excessive optimism and excessive pessimism. I hope you set up a balanced strategy that endures the immediate shocks without losing your focus. Watching the tug-of-war between the market and policy step by step to find your way is the correct attitude to take toward government regulatory measures.
Kim Hak-ryeol, head of the Smart Tube Real Estate Research Institute and famous by his pen name "Pashong," previously served as a team leader at the Real Estate Research Division of Gallup Korea. He operates the Naver blog "Pashong’s World Exploration" and the YouTube channel "Stue TV." He is the author of books including "Rewriting the Republic of Korea Real Estate User Manual (2025)," "The Power of Gyeonggi 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 Republic of Korea Real Estate (2021)," and "From Now On, Only Places That Rise Will Rise (2020)."