Triple Intervention in Real Estate: Look Beyond Home Prices to the Jeonse/Monthly Rent Market and the Housing Ladder

Government intervention in the market largely takes the form of support, regulation, and taxes. All three of these tools are being deployed simultaneously in the current administration’s real estate policy. The problem is not the intensity of intervention, but its direction and combination. If purchasing power is boosted through support while loans and transactions are constrained by regulation, and then listings are pressured onto the market through taxes, not only the home sales market but also the jeonse and monthly rental market can become rigid.

Real estate policy should not be judged solely by whether housing prices rise or fall. We must also examine whether the sales and rental markets are functioning smoothly, and whether people without homes can move into better housing with financing suited to their income and ability.

◆ Expanded support must lead to actual supply

The government is expanding public housing site development, public housing supply, rent support for young people, and policy finance for young people and newly married couples. It is necessary to support vulnerable groups exposed to high housing costs and the risk of jeonse fraud. However, because supply plans can be scaled back due to permit delays and rising construction costs, performance should be evaluated not by the number of units announced but by the number of units actually completed for occupancy and the length of project timelines.

If low-interest loans and subsidies alone are expanded when housing supply is insufficient, the increased purchasing power may simply be absorbed into higher home prices and rents. Policy support should therefore be designed not to stimulate demand across the entire market, but to precisely support housing-vulnerable groups while being paired with a meaningful expansion of supply.

◆ Loan regulations must not block the ladder for young people

The government is limiting mortgage loan ceilings in the Seoul metropolitan area and other regulated areas, while curbing loans and transactions by owners of multiple homes. Managing household debt and suppressing speculative borrowing are necessary, but if loans are uniformly restricted based on housing prices, then cash on hand becomes more important than income. Even people in their 20s and 30s with stable income and repayment capacity find it difficult to enter the housing market without parental financial support, while those with substantial cash assets are relatively less affected by the regulations.

Young people should not be encouraged to borrow excessively, but access to financing should not be cut off for homeless end users who can repay principal and interest over the long term. Loan regulations should be designed around income, existing debt, and repayment capacity rather than home prices or age. At the same time, long-term, fixed-rate, amortizing loans should be expanded, while speculative borrowing should be managed separately.

◆ Taxes should be predictable rules, not punishment

It is reasonable in itself to impose appropriate costs on holding real estate. But when homes are taxed punitively based on the number owned, or when tax rates and deduction standards are changed every time the government changes, market predictability is undermined.

If capital gains tax burdens are excessively high, homeowners delay selling, creating a “lock-in” of listings. High acquisition taxes also block first-time home purchases by people without homes and normal residential mobility by existing owners. Imposing both heavy holding taxes and transaction taxes at the same time is like demanding that owners put homes on the market while charging a steep toll on transactions.

The burden of acquisition and capital gains taxes should be lowered to encourage transactions and new listings, while holding taxes should be broad-based, moderate, and designed to be predictable over the long term. Taxes should not be a tool for punishing specific groups, but market rules that support the efficient use of housing and smooth mobility.

◆ A locked sales market spreads to the jeonse and monthly rental market

A frozen real estate market does not stop at home sales. If homeowners delay selling because of taxes and transaction costs, and if loan regulations also reduce the supply of new rental housing, then listings in the jeonse and monthly rental market may decline as well. Landlords reflect taxes and financing costs in rents, and seek to convert jeonse into monthly rent or semi-jeonse in order to reduce the burden of returning jeonse deposits. Meanwhile, tenants remain in the existing jeonse and monthly rental market because loan regulations prevent them from entering the home sales market. Supply declines while demand cannot move, causing even the rental market to seize up.

The decline in jeonse listings and the shift toward monthly rent place a particularly heavy burden on young people. As monthly housing expenses rise, saving and asset accumulation become even more difficult. To stabilize the rental market, the focus should be not on suppressing prices but on revitalizing the supply of private rental housing and maintaining consistent and predictable lease-related rules.

◆ The most disadvantaged are young people who still do not own a home

Current policy provides low-interest loans and public housing to young people and genuine end users, while reducing the overall volume and ceilings of lending. It demands that owners of multiple homes put properties on the market, yet imposes heavy taxes at the transfer stage. Public housing supply takes time, but the effects of loan and transaction regulations appear immediately.

Under this policy mix, those most disadvantaged are people in their 20s and 30s who still do not own a home. They do not benefit from rising asset prices, yet must bear higher jeonse and monthly rental costs, while finding it harder to buy a home using loans. In the end, parental assets, rather than an individual’s income and effort, determine whether one can enter the housing market.

What young people want is not just another special housing allocation or a one-time subsidy. They want a predictable housing ladder that allows them to move from monthly rent to jeonse, and from jeonse to homeownership, based on their own income and manageable debt.

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Restore supply and mobility, rather than controlling prices

Real estate policy should focus on expanding actual supply and ensuring smooth residential mobility. Redevelopment, reconstruction, and permitting procedures should be rationalized so that the private sector can supply housing and rental homes at a wide range of price points. Financial regulation should shift toward a repayment-capacity standard, and transaction taxes should be lowered to encourage listings and residential mobility. Holding taxes and lease rules should be administered in a predictable way over the long term, while protections for jeonse deposits and disclosure of transaction information should be strengthened.

The government’s role is not to directly control housing prices and transactions, but to establish rules that allow the market to function smoothly while protecting against financial risk and supporting vulnerable groups. Only when support, regulation, and taxes are consistently designed toward the goals of expanding supply and normalizing transactions can the gridlock in both the sales and rental markets be eased and the housing ladder for young people restored.

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Original title: 부동산 삼중개입, 집값보다 '전월세 시장'과 '주거 사다리'를 보라

Author: Gwang yong Go

Date: 2026-06-25

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=press&pn=1&idx=29210