Shift Toward 'Less Pricey' Homes Raises Concerns Over Jeonse and Monthly Rent Market Stability

[Anchor]

Will this tax reform plan truly resolve issues in the real estate market? While it could temporarily increase housing supply, concerns are simultaneously being raised over the jeonse and monthly rent markets.

Reporter Chae Heesun takes a closer look.

[Reporter]

Following a period of a wait-and-see stance ahead of the tax reform announcement, the market is anticipating an increase in transactions.

[Jung Ji-shim / Real Estate Agent (Gangnam-gu, Seoul): We expect inquiries to increase somewhat. For older adults, if tax burdens grow, continuing to hold onto properties becomes quite burdensome.]

First, projections suggest that properties from elderly homeowners and multiple homeowners looking to avoid heavy taxes will hit the market.

In particular, because heavy capital gains taxes on multiple homeowners have been eased once again, evaluations indicate that conditions are favorable for drawing out listings until 2028.

However, some outlooks remain uncertain as to whether this can lead to overall price stabilization in the real estate market, even if it temporarily eases the freeze on listings.

This is because demand could flock toward so-called "less pricey" homes—houses with an officially assessed value of 1.4 billion won or less that are exempt from the comprehensive real estate holding tax, or properties with relatively lower tax burdens.

[Nam Hyuk-woo / Real Estate Researcher, Woori Bank: A psychological resistance line is likely to form at the tax base brackets where property tax rates surge. Consequently, demand could rise in secondary areas rather than the most preferred locations.]

There were widespread voices of concern regarding the jeonse and monthly rent markets.

This is because increased burdens on single-home owners who do not reside in their properties have heightened incentives to ask tenants to leave and move in themselves.

[Kim Hyun-dong / Professor of Business Administration, Pai Chai University: The unstable situation in the Gangnam lease market could have a ripple effect, spilling over to lease markets in Yongin, Bundang, and Gwacheon, or acting like pouring fuel on rising home prices.]

Opinions are also emerging that increased taxes will be reflected in jeonse and monthly rent prices, ultimately passing the burden onto tenants.

(Video Reported by Lee Jae-young | Video Edited by Park Choon-bae | VJ: Jung Han-wook)

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