Growing Confusion in Real Estate... 'Jeonse Prices, Tax Resistance, and Disorganized Remarks' Challenges

Seoul Apartment Prices Rise Slows for 2 Consecutive Weeks
Policy Effects... Yet Market Remains Unstable
Sharp Increase in Jeonse Prices, Landlords Face Severe 'Jose Jeohang' Resistance

(Photo by Yonhap News)

[Asia Economy Reporter Moon Jiwon] The real estate market is becoming increasingly chaotic due to the government's successive real estate measures and inconsistent remarks. Although the strong regulations have somewhat slowed the rise in housing prices, especially in Seoul, instability continues as issues such as the 'administrative capital relocation,' 'possibility of easing reconstruction regulations,' and the 'Three Lease Laws' cause sharp increases in housing and jeonse prices in certain areas.

According to the Korea Real Estate Board on the 26th, as of the third week of this month, apartment prices in Seoul rose by 0.06% compared to the previous week. The upward trend has continued for seven consecutive weeks, but the rate of increase has slowed over the past two weeks (0.11% → 0.09% → 0.06%), indicating a move toward stabilization. In fact, due to increased tax burdens on multi-homeowners following the June 17 and July 10 measures, inquiries about purchasing in Seoul have reportedly decreased.

However, the market remains unstable. The soaring jeonse prices are a prime example. Seoul apartment jeonse prices have risen for 56 consecutive weeks. As the government and ruling party push the 'Three Lease Laws,' which include the jeonse price cap and contract renewal rights, jeonse listings have recently decreased and deposits have risen further. This sharp increase is seen not only in Seoul but also in neighboring areas such as Hanam (0.88%), Hwaseong (0.47%), and Sejong (0.99%).

In Sejong, apartment prices have surged by hundreds of millions of won following remarks by Kim Tae-nyeon, the floor leader of the Democratic Party, about the 'administrative capital relocation.' Although discussions between ruling and opposition parties have not even begun, Kim's comments have caused listings to disappear and asking prices to rise, fueling an overheated atmosphere.

Seoul City recently reportedly submitted a position to the government to ease reconstruction regulations, raising expectations for reconstruction projects in areas such as Yeouido in Yeongdeungpo-gu and Apgujeong in Gangnam-gu. Seoul, which has clashed with the government over the lifting of the Greenbelt, is said to have proposed to the Ministry of Land, Infrastructure and Transport to normalize reconstruction projects that had been blocked. Although the possibility of immediate deregulation is low, the mere expectation has caused asking prices for reconstruction apartments in Yeouido and Apgujeong to jump sharply.

The government and ruling party previously caused market confusion by making fragmented and uncoordinated remarks regarding the lifting of the Greenbelt. The Ministry of Strategy and Finance, Ministry of Land, Infrastructure and Transport, Seoul City, and key ruling party figures failed to send unified signals on this sensitive issue, adding political controversy to an already unstable real estate market.

Public backlash is growing stronger among citizens burdened or harmed by the successive real estate measures. Groups seeking relief for victims of the retroactive application of the June 17 regulations, the Rental Business Association Steering Committee, and opponents of the Three Lease Laws held a candlelight rally yesterday afternoon in front of the Korea Deposit Insurance Corporation in Jongno-gu, Seoul. Nearly 1,000 people reportedly attended the rally.

They criticized the government's real estate policies, chanting slogans such as 'Withdraw the Three Lease Laws,' 'Protect Private Property,' and 'Withdraw Retroactive Application of Interim Payment Loans.' Citizens harmed by restrictions on interim payment loans and increased acquisition tax, capital gains tax, and comprehensive real estate tax plan to hire law firms and proceed with a collective constitutional lawsuit.

This content was produced with the assistance of AI translation services.