[Op-Ed] For the 10/15 Triple Regulations, the Answer Is Sustained, Realistic Supply Measures

The October 15 Triple Regulations Freeze Even Normal Transactions and Cripple the Market’s Price Discovery Function

The Reconstruction Excess Profit Recapture System should be phased out, and reconstruction and redevelopment procedures should be greatly simplified

Stop chasing short-term regulatory results and push ahead steadily with mid- to long-term supply plans and execution

The government must clearly present a plan to concentrate housing supply in central Seoul and give the market confidence that it will follow through

Apartment prices in Seoul have now risen for 40 consecutive weeks. The bigger problem is that, despite rising prices, transaction volumes have plunged, creating a situation in which the market is under siege on all sides. At the center of this market distortion is the October 15 real estate measures, which focused excessively on suppressing demand.

The October 15 measures are centered on “triple regulations” that designate all of Seoul and 12 areas in Gyeonggi Province simultaneously as adjustment target areas, speculative overheating districts, and land transaction permit zones. Although the original intent was to curb overheating, the result has been a sharp freeze that has halted even normal transactions and crippled the market’s price discovery function. The market has lost the basis for determining “what the right price is,” and confusion among end-users is only growing.

In particular, the expansion of land transaction permit zones is an extreme prescription that comes close to “blocking market entry.” By effectively banning all transactions other than those for actual owner occupancy, it infringes on freedom of residence and pushes the market into an abnormal wait-and-see mode. The contraction in transactions merely obscures the underlying problem of supply shortages and amplifies distortions in the indicators.

The essence of the current situation is not speculative demand but chronic “supply shortages.” Starting next year, Seoul is expected to supply an average of 15,000 housing units per year, but this is nowhere near enough to meet market expectations. Regulations aimed only at suppressing demand cannot replenish depleted supply and cannot be a fundamental solution.

While the government talks about supply, it has in fact left in place key mechanisms that suppress it, such as the Reconstruction Excess Profit Recapture System. This system, which recaptures a large portion of profits generated from reconstruction projects, severely undermines project viability and acts as a shackle that fundamentally blocks reconstruction, a key source of housing supply in central urban areas. In the end, excess profit recapture charges amounting to hundreds of billions of won send a signal of a future supply cliff, which only further fuels expectations of rising prices today.

As the home sales market has been blocked by regulation, housing demand has naturally shifted into the jeonse and monthly rental markets. But with the supply of rental housing also shrinking due to the suspension of reconstruction projects and other factors, a balloon effect has appeared in the form of surging jeonse prices. Ultimately, ordinary homeless households who have been kicked off the property ladder are now suffering a double burden in the rental market as well.

First, to achieve a meaningful expansion of supply, the regulations weighing down the market must be removed. The Land Transaction Permit System, which paralyzes market functions and infringes on freedom of residence, should be fully reexamined and put on a path toward abolition. Regulations that merely freeze transactions and create misleading indicators only damage the market’s self-correcting capacity.

Next, to open up room for more supply in urban centers, the Reconstruction Excess Profit Recapture System should be phased out, and reconstruction and redevelopment procedures should be greatly simplified. Burdens amounting to hundreds of millions of won per individual that undermine project viability will ultimately lead to a future supply cliff. These shackles must be removed so that quality housing in central urban areas can be supplied in a timely manner.

Finally, the only real solution for stabilizing the market is “continuous and realistic supply.” To that end, there is an urgent need for a whole-of-government supply task force in which the central and local governments work together to discuss practical housing supply measures. Rather than obsessing over short-term regulatory achievements, the government must steadily implement mid- to long-term supply plans and execution without wavering.

The most important elements of real estate policy are “predictability” and “trust.” The government must present a clear direction to concentrate housing supply in central Seoul and give the market confidence that it will keep that promise. In a market where rules frequently change and promises are not kept, no one can plan for long-term housing stability.

Inhyuk Jang, Intern Researcher, Center for Free Enterprise (CFE)

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Original title: [칼럼] 10·15 삼중규제, 지속적이고 현실적인 '공급 대책'이 답

Author: In-hyeok Jang

Date: 2026-01-28

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=free_opinion&idx=28553