DEEP ANALYSIS

Seoul Metropolitan Area Apartments Clash Between Record-Breaking Regulations and Record-Breaking Supply Shortages

Following the June 27 loan regulations and October 15 expansion of regulated zones in the second half of 2025, combined with the resumption of the heavy capital gains tax surcharge in May 2026, unprecedented multi-layered regulations are currently operating in the Seoul metropolitan area. However, one year after the resumption of the heavy tax surcharge, apartment listings in Seoul have decreased by about 10%, while price growth has actually expanded to the 0.2-0.3% range, demonstrating a phenomenon of 'price strength amid locked listings.' The jeonse (lump-sum lease) market is also unstable, with Seoul's cumulative apartment jeonse increase reaching approximately six times that of last year (3.77%), underpinning sales prices from below. The root cause is a shortage of supply: Seoul's move-in volume for 2026 is projected to drop 48% year-on-year to about 16,000 households, marking the lowest level nationwide in 13 years. As strengthening holding taxes, such as raising the comprehensive real estate holding tax and reducing long-term holding special deductions, are being discussed as the next regulatory cards, deliberations on tax law amendments in the second half of the year are expected to be a watershed moment for the market.