[비즈한국] May 9, 2026, is not merely a tax sunset date. It is the day that marks the end of the expectation—one the market has relied on comfortably for the past few years—that “it will just be extended again anyway.” The government officially announced on February 12 that the deferral of the heavy capital gains tax on multi-homeowners will end on May 9 as scheduled, and the President personally blocked any expectations of further extensions on January 25, stating, “The May 9, 2026, termination was already decided in February 2025.”
However, to reduce market confusion, the government also introduced supplementary measures for contracts signed by May 9, allowing a four or six-month grace period for balance payments and registration, depending on the region. In other words, May 9 is not a surprise regulation intended to shock the market, but rather a pre-announced end point for a policy and, at the same time, a turning point that will alter the expectation structure of market participants.
At this point, there is a misunderstanding that needs to be cleared up first. The claim that housing prices will immediately crash after May 9 is an exaggeration, and conversely, the prospect that they will surge again as soon as the regulatory shock passes is hasty. The market is not currently moving in one direction. As of the first week of March, according to the Korea Real Estate Board, national apartment sales prices rose by 0.04% and Jeonse prices by 0.07%. While sales prices in Seoul rose by 0.09%, some high-end neighborhoods like Gangnam-gu, Songpa-gu, and Yongsan-gu showed signs of adjustment.
It is a typical mixed trend: Seoul as a whole is rising, yet some districts within it are declining, and while the capital region remains strong, regional trends are diverging. This means that the market after May 9 is highly unlikely to experience a “uniform national decline” or “uniform national surge,” but will likely follow completely different trajectories based on location, supply/demand, and policy sensitivity.
Rather, what we should focus on more now is not sales, but Jeonse (lump-sum deposit rental). The core signal of the current market is appearing in the structure of leasing rather than prices. According to the Ministry of Land, Infrastructure and Transport’s housing statistics for January 2026, the proportion of monthly rent among all lease transactions reached a record high of 66.8%. Jeonse transactions are decreasing while monthly and semi-monthly rent are rapidly increasing; the share of monthly rent has jumped by more than 20 percentage points in four years, from 45.6% in January 2022.
This is not merely a change in transaction methods. It signifies that the Jeonse leverage structure that has supported Korea’s housing market is weakening, and that as selling pressure on multi-homeowners intensifies, some rental properties may flow into the sales market, further reducing Jeonse supply. While the government assumes that if multi-homeowners sell their homes, Jeonse/monthly rental demand will also decrease, in reality, there is a strong possibility that non-homeowning latent demand that fails to convert to home ownership will linger in the rental market for a longer period. Therefore, the first battlefield after May 9 may not be the sales market, but the Jeonse market.
Furthermore, supply indicators are by no means at a reassuring level. According to housing statistics for January 2026 released at the end of February, nationwide housing permits stood at 16,531 units, a 26.4% decrease compared to the same month last year, and Seoul permits fell by 55.9% to 1,226 units. Reports also indicated that completions nationwide dropped 46.5% to 22,340 units, and construction starts in Seoul decreased by 63.7% to 741 units.
Supply is felt through construction starts and completions, not through announcements. The current decline in permits and starts will translate into a shortage of move-ins one to three years from now, rather than affecting today’s prices. No matter how many supply plans the government releases, the market looks at ‘completions,’ not ‘plans.’ This is precisely why it is difficult to conclude that even if sales prices falter momentarily after May 9, it will lead to a medium-to-long-term downward trend. This is due to the time lag in supply.
Even when looking at the expected move-in volume for the next two years, one must be cautious with optimism. According to data released by the Korea Real Estate Board and Real Estate R114 on February 27, the total planned move-in volume for multi-family housing nationwide for the two years from 2026 to 2027 is 414,906 units, with 220,954 units in the capital region. Seoul’s combined total for two years is 44,355 units, with 27,158 in 2026 and 17,197 in 2027. While one cannot say there is ‘zero supply’ based on the numbers alone, considering the overall scale of demand in Seoul and the concentration of preference for specific regions, it is difficult to see this volume as sufficient to resolve the felt shortage.
Moreover, these figures are estimates as of the end of December 2025; if construction delays are reflected, actual move-ins could be even lower. In short, what determines the market after May 9 is not the tax rate itself, but ‘how many sold homes will not remain in the rental market’ and ‘whether there are enough new homes coming in.’ The figures released so far are not particularly optimistic regarding the latter.
While interest rates are also a variable, they cannot currently be seen as a card that will change the direction of the market at once. The Bank of Korea maintained the base rate at 2.50% on February 26. This judgment was made because growth is better than expected and financial stability risks persist, while inflation generally hovers near the target level. On one hand, this means there is no sudden shock of interest rate hikes, but on the other, it means there will be no immediate easing substantial enough to push the market up again significantly.
In other words, the market after May 9 will be neither a “market where a sharp drop in interest rates covers up all negative factors” nor a “market where a sharp rate hike forces everyone to dump properties.” Ultimately, the market after the tax expiration is likely to be influenced more by supply and demand—especially Jeonse supply/demand and the strength of effective demand by region—than by price.
So, what will happen immediately after May 9? First, there is a high possibility that properties from multi-homeowners will increase once more. In January, Seoul apartment sales already increased by 22.0% compared to the previous month to 5,945 cases, and some reports interpreted this as preemptive trading ahead of the May 9 termination. In other words, the move to sell to avoid the tax expiration and the move to buy property before that date are already happening ahead of schedule.
This flow is likely to continue right up until May 9, after which the transaction volume might dip as low-priced properties available for contract are largely exhausted. What is important is not the price, but the transaction volume. The market immediately after May 9 is more likely to see a “transaction vacuum” before a “price crash.” This is because potential buyers will become more cautious, and sellers will recalculate their post-tax profits.
Second, regions sensitive to land transaction permits and policies, such as the three Gangnam districts and Yongsan, may face greater short-term adjustment pressure. In recent statistics, these areas showed declines or stagnation even amidst the overall rising trend in Seoul. These areas have high price points, are sensitive to policy signals, and carry high symbolic value, making it easy for buyers to adopt a wait-and-see approach.
Conversely, areas in Seoul that are supported by real demand and move-up demand, such as Gangseo, Yangcheon, Yeongdeungpo, Seongbuk, Gwangjin, and Dongdaemun, may remain relatively firm. In the capital region, areas that combine preferred locations with living infrastructure, such as Suji in Yongin, Hanam, and Dongtan, are highly likely to hold up. Ultimately, the essence of the market after May 9 will not be a contest between “Seoul vs. Regional,” but between “symbolic regions suppressed by policy” and “alternative regions supported by real demand.”
Third, regional areas (outside the capital) are more complex. Looking at the national average, regional areas are also maintaining an upward trend, but in reality, places showing recovery like Busan and Ulsan coexist with stagnant markets like Daegu and Gwangju, and areas where declines continue, such as some provinces. As of the end of January, nationwide unsold housing stood at 66,576 units, and unsold housing after completion increased to 29,555 units. Unsold inventory in the capital region increased while it decreased in regional areas, but the absolute scale remains larger in the regions.
Therefore, the regional market after May 9 will be influenced far more by “move-in burdens, unsold inventory, regional jobs, and new demand tiers” than by the “tax termination.” The fact that multi-homeowner listings have increased in Seoul does not solve the unsold housing problem in the regions, nor does Seoul’s resilience mean the regions will recover as a whole. This phase is highly likely to involve not just a divergence between the capital region and the provinces, but a re-diversification within the provinces themselves.
One could call the end of the multi-homeowner capital gains tax deferral a “normalization.” Indeed, the President explained it as a matter of resolving abnormalities and returning to a predictable society. However, the word “normalization” does not immediately lead to market stability. Policies move with intent, but the market moves according to structure. If you only suppress the sales market in a structure where Jeonse is decreasing, monthly rent is increasing, and supply is slowing, the air from the squeezed balloon may simply move into the leasing market and prices in key areas.
Whether it is taxes, loans, or transaction regulations, ultimately, to stabilize the market, sufficient move-ins and a predictable supply schedule must follow. Otherwise, even if it looks quiet in the short term, it will return as higher Jeonse prices and more severe polarization in a few months.
Therefore, summarizing the real estate market after May 9 in one sentence: while sales may falter for a moment, the initiative in the market is highly likely to be taken back by Jeonse and supply. Even if multi-homeowner properties hit the market and suppress prices in symbolic areas, it is not easy for that to connect to a long-term decline across all key areas supported by real demand. In preferred areas of Seoul and the capital region, the aftershocks of supply shortages may last longer than the policy shock, and in regional areas, the differentiation of unsold housing and the local economy will act as a bigger variable than tax issues.
Ultimately, May 9 is neither the starting point of a bear market nor the flare of a bull market. It is simply the date when the Korean real estate market shifts once again from the “time of taxes” to the “time of supply and demand.” And just as there is no policy that can defeat the market, no slogan that goes against supply and demand will last long.
If the government wants to stabilize the market after May 9, it needs faster supply rather than stronger slogans. If market participants want to prepare for the time after May 9, they should look at Jeonse and move-in volume before reading news headlines. And there is one thing we must all remember: the real estate market does not end with a line of tax rates. While taxes can change the direction, what ultimately creates a trend is supply, demand, and the strength of the real demand that persists between them. This time will be no exception.
Kim Hak-ryeol, head of the Smart Tube Real Estate Research Institute, known by his pen name ‘Pashong,’ previously served as a team leader at the Korea Gallup Real Estate Research Institute. He operates and hosts the Naver blog ‘Pashong’s World Exploration’ and the YouTube channel ‘Stue TV.’ His books include ‘The Newly Written User Guide to South Korean Real Estate (2025),’ ‘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),’ ‘South Korea Real Estate Future Map (2021),’ and ‘From Now On, Only Places That Will Rise, Rise (2020).’”