Subdued Real Estate Market... Will Properties Come Out? What is the Impact on Jeonse and Monthly Rent?

[Anchor]

With this real estate tax reform, some in the market are raising the possibility that properties might be temporarily released. However, concerns persist that measures inducing owner-occupancy could reduce the supply of jeonse (lump-sum housing deposits) and monthly rental properties, thereby worsening the housing rental crunch.

Reporter Chae Heesun has the details.

[Reporter]

The market, which had maintained a wait-and-see stance ahead of the announcement of the tax reform proposal, 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 burden increases, continuing to hold onto properties becomes quite burdensome...].

First, projections are emerging that properties held by elderly people and owners of multiple homes attempting to avoid tax burdens will be released into the market.

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

However, some outlooks suggest that while this may temporarily alleviate the locking up of properties, it remains uncertain whether it will lead to overall price stabilization in the real estate market.

This means demand could flock to homes with an official assessed price of 1.4 billion won or less, which are excluded from the comprehensive real estate holding tax, and so-called less "smart single homes" that carry a relatively low tax burden.

[Nam Hyuk-woo / Woori Bank Real Estate Analyst: A psychological resistance line is likely to form in the tax base brackets where property tax rates surge. Demand for secondary areas rather than the most preferred regions could increase somewhat.]

There were many voicing concerns regarding the jeonse and monthly rent markets.

This is because as the burden on non-resident single-home owners grows, the incentive to make tenants leave and move in themselves has increased.

[Kim Hyun-dong / Professor of Business Administration, Pai Chai University: Won't the unstable situation in the Gangnam leasing market affect the leasing markets in Yongin, Bundang, and Gwacheon, or have the effect of adding fuel to rising house prices?]

Opinions are also emerging that the increased taxes will be reflected in jeonse and monthly rent prices, eventually being passed on to 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.