Photo: Finance Minister Gu Yun-cheol announces new real estate regulations. Credit: Ministry of Strategy and Finance.
On October 15, the Lee Jae-myung 이재명 administration attempted to rein in housing costs with its harshest regulations yet on real estate transactions yet. The new regulations designate all of Seoul 서울 and 12 regions in Gyeonggi-do Province 경기도 as a special district in which every real estate transaction requires a permit issued only to applicants who fulfill a two-year residency requirement - all but eliminating the possibility of owning multiple homes to be rented out.
The new regulations also significantly restrict mortgage financing, putting a cap of KRW 600m (USD 423k) for loans taken out for houses priced below KRW 1.5b (USD 1.06m), KRW 400m (USD 282k) for houses priced between KRW 1.5b and 2.5b (USD 1.76m), and KRW 200m (USD 141k) for houses priced above KRW 2.5b - essentially choking off the flow of borrowed money into costly houses.
Presidential Chief of Policy Kim Yong-beom 김용범 대통령실 정책실장 defended the measures as “extraordinary responses to the extraordinary times” of a real estate market showing early signs of overheating, and pledged that the government will address the housing supply in the coming months.
