From Zone Expansion to Supply Increase: New Government’s Real Estate Strategy: Strong Measures

Expanding Regulatory Zones: Strong Measures

Strong Measures: The new administration is expected to expand regulatory zones, including Adjustment Areas, Speculative Overheated Zones, and Land Transaction Permission Zones. Notably, expanding “land-permit zones” to block gap investments is highly likely. Districts such as Mapo and Seongdong in Seoul, and Gwacheon and Bundang in Gyeonggi—where housing prices outpace inflation—already meet criteria. Once designated, LTV for first-time homebuyers drops from 70% to 50%, and to 30% for multi-home owners. The DTI cap will tighten to 40%, significantly reducing borrowing capacity.

Tightening Loan Limits and Rates: Strong Measures

The government is also considering stricter application of Debt Service Ratio (DSR) rules and differentiated increases in mortgage surtax rates. While loans for owner-occupied homes may remain unchanged or see minor relaxations, non-owner-occupied loans are likely to face reduced overall limits and tighter regulations on jeonse loans. For instance, higher surtax rates may be imposed on high-end housing rent loans, and banks’ total mortgage ceilings could be lowered to recalibrate lending practices across the financial sector. 사무실 임대

Targeted Measures and Non-Owner-Occupied Lending Controls

Rather than broad tax hikes, “pinpoint” measures are in focus. Possible actions include reducing overall mortgage ceilings at commercial banks or applying differential surtax rates only for properties above certain values. Enhanced proof-of-funds requirements will curb money laundering and disguised gifting. Separate regulations for non-owner-occupied loans—such as capping loan-to-value at 30%—aim to suppress speculative demand. These tailored steps seek to protect genuine buyers while deterring investors. 경제뉴스