The real estate measures announced on October 15 will soon mark their one-year anniversary. While apartment prices in Seoul have risen by around 10%, there are positive assessments that the government has curbed overheating and speculative demand in the Gangnam area. However, the government's promise of housing stability for citizens cannot be evaluated without considering the anxieties of tenants.
At that time, the government designated all of Seoul and 12 regions in Gyeonggi Province as regulated areas and land transaction permission zones. It restricted gap investments, which involve purchasing properties with existing leases, by enforcing a requirement for actual residence. Additionally, the limit on mortgage loans for homes in the metropolitan area and regulated zones was reduced to 400 million won for properties exceeding 1.5 billion won and to 200 million won for those over 2.5 billion won. This was designed to curb borrowing for high-priced homes and reshape the market to focus on actual residence.
There are signs that this intention has had some effect. According to statistics from the Korea Real Estate Agency, from October 20 of last year to October 5 of this year, the increase in apartment prices in Gangnam was 1.40%, and in Seocho, it was 3.35%, both lower than the Seoul average of 10.42%. Recently, both areas have seen price declines for nine consecutive weeks. While it cannot be denied that the measures have curbed borrowing for high-priced homes and gap investments, it is important to note that changes in taxation and other factors have also played a role, so it would be inaccurate to attribute all outcomes solely to the October 15 measures.
The issue lies in overlooking the demand that has shifted rather than just the demand that has been suppressed. Analysis suggests that actual demand has concentrated on mid-priced homes, which have relatively greater borrowing potential. During the same period, the price in Seongbuk-gu rose by 16.52%. While there may be a sense of relief in focusing on Gangnam, the options for those seeking relatively cheaper homes have become more expensive. A decrease in transaction volume does not necessarily mean that speculative demand has been filtered out; it also includes actual buyers who have given up due to a lack of funds.
While the rise in mid-priced areas might seem like a positive development, it does not necessarily indicate a reduction in regional disparities. For existing homeowners, this means an increase in asset value, but for young people and newlyweds, it raises the barrier to entry. Even if the price gap with Gangnam narrows, if the distance between salaries and home prices widens, the housing situation has not improved. Polarization is not only between Gangnam and Gangbuk but also exists between homeowners and tenants within the same neighborhood.
The situation is even more direct with lease prices. During the same period, the average lease price for apartments in Seoul rose by 9.96%, while in Seongbuk-gu, it increased by 15.64%. According to Asil's data, the number of lease listings in Seoul has decreased by 16.6% compared to October 15 of last year. While this does not reflect the total rental housing stock, it indicates that those searching for new leases have fewer options. If purchasing is hindered by high mortgage thresholds and finding leases is difficult, tenants may have to consider more expensive monthly rents or homes farther away.
For example, if a 500 million won lease increases by 10%, the additional deposit required is 50 million won. This does not mean that all renewal contracts will increase by that amount. However, households that exhaust their renewal rights and seek new contracts will face higher market rates. Without a substantial amount of money, mixing in monthly rent reduces savings potential, and moving to the outskirts can increase commuting and caregiving burdens. While the policy buys time, tenants are spending more money and time.
Of course, the lease crisis, compounded by supply shortages and the shift to monthly rents, cannot be solely blamed on the October 15 measures. If tenants purchase homes, demand for leases will also decrease. Therefore, it is essential to verify the impact of actual residence regulations on rental supply and demand in different regions and to address any side effects. In a few years, simply aiming for construction targets will not suffice to address the expiration of current contracts. It is necessary to expand transaction opportunities while protecting the residence of existing tenants and to adjust regulations based on regional overheating and lease conditions. Additionally, the provision of public rental housing that is ready for occupancy and support for deposits and monthly rents for vulnerable households must be expedited.
Restricting gap investments is a policy tool, while ensuring housing stability for citizens is the ultimate goal. It cannot be claimed that the goal has been achieved merely because the measures have been implemented. While news of stabilizing home prices in Gangnam is welcome, it does not mean that tenants can afford the increased deposits.
* This article has been translated by AI.
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