Shift Toward "Less Premium" Homes Raises Concerns Over Jeonse and Monthly Rent Market Stability

[Anchor]

Will this latest tax reform plan effectively resolve the issues in the real estate market? While it could temporarily increase housing supply on the market, simultaneous concerns are being raised regarding the jeonse (lump-sum housing deposits) and monthly rent markets.

Reporter Chae Heesun takes a closer look.

[Reporter]

The market, which had been observing a wait-and-see stance ahead of the tax reform announcement, is anticipating an increase in transactions.

[Jung Ji-shim / Real estate agent (Gangnam-gu, Seoul): We expect inquiries to increase somewhat. For the elderly, if their tax burdens grow, continuing to hold onto properties becomes quite burdensome....]

First, projections suggest that properties from elderly owners and multiple homeowners looking to avoid tax burdens will hit the market.

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

However, some forecast that while this may temporarily relieve the freeze on listings, it remains uncertain whether it will lead to overall price stabilization in the real estate market.

The concern is that demand could flock to homes with an officially assessed price of 1.4 billion won or less, which are exempt from the comprehensive real estate holding tax, and to so-called less premium homes that carry relatively lighter 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. As a result, demand could increase in secondary areas rather than the most preferred regions.]

There were widespread concerns regarding the jeonse and monthly rent markets.

This is because increased burdens on single-home owners who do not reside in their properties amplify the incentive to evict tenants and move in themselves.

[Kim Hyun-dong / Professor of Business Administration, Pai Chai University: The unstable conditions in the Gangnam lease market could affect lease markets in Yongin, Bundang, and Gwacheon, or act in a way that adds fuel to rising home prices.]

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

(Photo courtesy of Yonhap News / Reported by Lee Jae-young, Video by Park Choon-bae, VJ: Jung Han-wook)
※ Please note: This article was translated by AI and may contain errors.