The South Korean government aimed to curb housing demand and stabilize prices by designating all of Seoul as a regulated area and tightening loan requirements. However, in the year following the implementation of the '10·15 real estate measures,' both apartment and rental prices in Seoul increased by around 10%. While transactions decreased, this did not lead to price stabilization, and demand shifted towards mid-priced and outer areas, exacerbating rental market pressures.
The 10·15 measures focused on designating all of Seoul as a regulated area, expanding land transaction permission zones, and differentiating mortgage limits based on housing prices to suppress buying demand. However, a year later, the market showed a disconnect between transactions and prices.
According to the Korea Real Estate Agency, from the third week of October last year to the first week of this month, Seoul's apartment sales prices rose by 10.42%, surpassing the 6.61% increase seen in the year prior to the measures. During the same period, rental prices also increased by 9.96%.
Analysis by Aju Economy, based on actual transaction data from the Ministry of Land, Infrastructure and Transport, revealed that the median transaction price for Seoul apartments in the same complexes and areas rose by 12.7%. The seven districts along the Han River—Seongdong, Mapo, Dongjak, Yangcheon, Yeongdeungpo, Gwangjin, and Gangdong—saw increases of 19.1%, while the three districts in Gangnam and Yongsan rose by 12.1%, and other areas increased by 10.5%.
In mid-priced and outer areas, both transactions and prices rose. In Nowon, Dobong, Jungnang, and Geumcheon, transactions increased after the measures, with apartment prices in Seongbuk rising by 16.52%, Seodaemun by 14.40%, Gangseo by 14.39%, Guro by 13.69%, and Nowon by 12.52%, all exceeding the average increase in Seoul.
Experts suggest that the significant reduction in loan limits for high-priced homes has shifted demand towards mid-priced housing. While the measures aimed to suppress transactions in key areas, they have instead led to a 'balloon effect,' where demand has not disappeared but has shifted to more affordable price ranges and locations.
The rental market has also seen a decrease in listings. According to real estate platform Asil, as of the 14th, the number of rental listings for Seoul apartments stood at 20,520, a 13.8% decrease from a year ago, while monthly rental listings fell from 19,183 to 17,148, a 10.7% drop. In Gyeonggi Province, rental listings decreased by 37.8% for jeonse and 47.2% for monthly rent, marking a more significant decline.
Several factors contribute to the decrease in listings, including a lack of new supply, but the mandatory residency requirements in land transaction permission zones and the difficulty of entering the sales market have also impacted the rental market. As rental and monthly prices rise, the burden of regulations is shifting to the housing costs of those without homes.
Shin Bo-yeon, a professor at Sejong University’s Department of Real Estate AI Convergence, stated, “The mid-priced housing and the rental market in those areas are the most unstable. If the demand for relocation due to urban renewal projects in Seoul overlaps, the instability in the rental market could worsen.” She added, “Now is the time to stabilize the rental market,” suggesting that tax benefits for registered rental business operators who adhere to a 5% cap on jeonse deposit increases should be maintained at least until 2030.
Go Jun-seok, a professor at Yonsei University’s Sangnam Institute of Management, noted, “Uniformly limiting loan amounts regardless of economic conditions can make it difficult for genuine buyers to purchase homes,” and cautioned that designating land transaction permission zones could increase anxiety about needing to buy before prices rise further.
Experts agree that simply expanding land transaction permission zones will not stabilize housing prices; attention must also be given to the shortage of rental listings and the conditions surrounding registered rental business operators.
* This article has been translated by AI.
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