Seoul's apartment prices have risen for 86 consecutive weeks, although the rate of increase has slowed. This marks a new record, surpassing the previous 85-week streak from June 2020 to January 2022. While this is an embarrassing statistic for the government, it signifies that opportunities for young people and newlyweds to purchase homes have become even more distant. Despite repeated promises to control housing prices, the barriers to homeownership have only increased.
Comparing the last 85 weeks, the cumulative increase during this current period is 17.5%, more than double the previous 7.7%. Although there were periods of decline in between, the burden on non-homeowners has intensified due to two lengthy periods of price increases. The fact that this latest surge began before the current administration took office does not lessen the responsibility. For young people, what matters more than which government is in power is whether there are homes they can afford to buy with their savings.
What has changed since the announcement of the 10·15 measures, which is now a year old? The government designated all of Seoul and 12 areas in Gyeonggi Province as regulated zones and restricted loan limits for high-priced homes. At the time, officials explained that broad regulations were necessary to prevent a balloon effect. While it was essential to curb excessive borrowing and gap investments, the immediate effect of these measures was a slowdown in the rate of price increases in Seoul. It is not fair to discuss failures without considering the effects of these regulations.
However, slowing the rate of increase is not the same as achieving housing stability. This week, while prices in the Gangnam area and Yongsan fell, overall prices in Seoul rose. As the threshold for high-priced homes increases, demand shifts to mid- to low-priced homes that are still accessible through loans. Just because the government has broadly grouped areas together does not mean that price movements between different ranges will cease. The 'adjustment' in the outskirts only raises the housing costs for non-homeowners who need to start from there.
Regulations operate differently depending on financial capacity. Tightening loans primarily affects those who rely on salaries and loans to purchase homes, rather than those with substantial cash reserves. The requirement for actual residence helps prevent gap investments but also restricts the supply of new rental properties. In fact, the number of rental listings in northeastern Seoul has decreased by about 45% since the implementation of the 10·15 measures in September of this year. Whether trying to buy a home or move rental properties, the need for larger sums of money has become a structural issue.
Housing prices cannot be explained solely by a single regulation, as they are intertwined with supply shortages, liquidity, and job concentration in Seoul. However, anticipating side effects and making adjustments is also part of policy responsibility. The combination of rising housing prices, tightening financial conditions, and a scarcity of rental units is nearly catastrophic for young non-homeowners. It is essential to ask who is facing the highest barriers from policies intended to curb speculation.
What should have been preserved is the normal flow of housing mobility. People should be able to rent near their workplaces, accumulate income and savings to buy homes, and move as their families grow. Blocking this demand makes it difficult to reduce polarization. Even if the price gap between Gangnam and the outskirts narrows, if opportunities for those with homes and those without become more distant, the housing divide will widen.
While speculative borrowing should be curtailed, pathways to financing for first-time buyers and actual residents must remain aligned with their repayment capabilities. The government's expansion of exemptions for the land transaction permit system is a starting point for adjustments. It is necessary to verify whether transactions can occur while respecting tenant contracts and whether the rental supply is increasing. Increasing public rental housing near workplaces and affordable housing must be proven through construction and occupancy schedules. Simply loosening loan restrictions could lead to price absorption, so financial adjustments and supply must be planned together.
The measure of policy success is not the intensity of regulations. The benchmark should be how much of their income young people and newlyweds are spending on housing costs and how much they need to save to purchase their first home. After two lengthy periods of rising prices, are we expected to tell them to wait even longer for their first home? Policies aimed at controlling housing prices should not hinder the ability to secure a home.
* This article has been translated by AI.
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