KB Financial Sees Housing Market Stabilizing; Tax Policy a Key Variable

Tighter household lending, expanded supply plans, designation of regulated zones and heavier tax burdens are beginning to show effects, and could cool this year’s rise in home prices, KB Financial Group’s research arm said. It cited tax issues — including heavier capital gains taxes on multi-homeowners and higher property holding taxes — as the biggest variable for the housing market this year.

The KB Financial Group Management Research Institute released its “2026 KB Real Estate Report” on May 5. The report reflects survey results and field feedback from about 700 people, including real estate experts, licensed brokers and private bankers, based on two rounds of polling conducted in January and April.

The report said last year’s sharp price gains centered on Seoul and parts of the greater capital area have begun to ease this year. As government measures are more fully reflected in the market, listings are increasing and the number of areas seeing price declines could expand, it said.

As of April 10, apartment listings in Seoul were up 33% from the end of last year, more than triple the national average increase of 9%, the report said. In Seoul’s Gangnam District, apartment sale prices have fallen for six straight weeks since March. Apartment prices in Gwacheon, Gyeonggi Province — which posted large gains last year — have also turned down. In Seoul’s Songpa, Seongdong and Gwangjin districts, price changes from January through April slowed sharply to 4%, 6% and 4.1%, respectively.

Market views are also shifting quickly. In the January survey, 81% of experts and 76% of brokers expected home prices to rise. In April, experts still leaned toward gains at 56%, but brokers were more likely to forecast declines, at 54%, showing a widening gap that the institute said reflects stronger regulatory effects in the field.

The report pointed to government policy as the key driver this year, saying buyer sentiment and price trends could swing depending on supply measures in the capital region, financial regulations and tax changes.

Asked which policy would most affect the housing market in the second half, 27% of experts and 33% of brokers ranked the implementation of heavier capital gains taxes on multi-homeowners as the top factor, the institute said.

For would-be buyers, the report said interest rates are likely to be the critical variable, noting that mortgage rates have continued to rise even as the benchmark rate has been held steady. As of last month, five-year fixed mortgage rates at the five major banks — KB Kookmin, Shinhan, Hana, Woori and NH Nonghyup — ranged from 4.2% to 6.8% annually, with the upper end nearing the 7% range.

Kang Min-seok, a researcher at the KB Management Research Institute, said regional polarization remains while risks such as supply shortages and rising construction costs still linger. “Government policy will be the major variable that determines the market’s direction going forward,” he said.