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  • Crowded leverage turns Kospi boom into bust
    Crowded leverage turns Kospi boom into bust SEOUL, August 11 (AJP) — South Korea’s spectacular stock bull run has ridden increasingly on borrowed money, with retail leverage growing at nearly twice the U.S. pace, heavily concentrated in a handful of large-cap stocks and turning the rally into an increasingly high-stakes bet. Outstanding margin loans reached 36.7 trillion won ($25.7 billion) at the end of June, 5.5 times the 6.7 trillion won recorded at the end of 2016, according to a report by Lee Hyo-sub, a senior research fellow at the Korea Capital Market Institute. That translates into average annual growth of 19.6 percent. U.S. margin debt increased 2.8 times over the same period, from $530 billion to $1.5021 trillion, or 11.6 percent annually, meaning Korean margin borrowing expanded at roughly 1.7 times the U.S. pace. Crowding in the money where the borrowed money went raises bigger concern. During the pandemic-era retail boom in 2020 and 2021, roughly half of Korea’s margin loans were concentrated in the junior KOSDAQ market. By the end of June this year, 28.6 trillion won, or 78 percent of the total, was tied to KOSPI stocks, compared with 8.1 trillion won on the KOSDAQ. Lee said that suggests leverage has migrated toward large-cap stocks and become increasingly concentrated in volatile sectors such as semiconductors. The shift has come alongside an extraordinary run in Korean equities. The KOSPI climbed 176 percent in the year through June 30, according to the report, far ahead of Taiwan’s 107 percent, Japan’s 73 percent, the Nasdaq’s 29 percent, Britain’s FTSE at 20 percent and China’s Shanghai Composite at 19 percent. Lee attributed the rally to stronger semiconductor earnings, increased global liquidity and government policies aimed at reviving the domestic capital market. The sharp gains, in turn, drew more retail investors seeking higher returns through borrowed money and leveraged products. The appetite for leverage has spread well beyond margin loans. Assets in Korean leveraged ETFs tracking twice the daily movement of their underlying assets reached 39.4 trillion won at the end of June, more than 13 times the 3 trillion won recorded at the end of 2016. That represents annualized growth of 31.1 percent, roughly twice the pace of the global leveraged ETF market. The structure of that market has also changed. Korean leveraged ETFs were previously dominated by products tracking broad indexes such as the KOSPI 200. Since single-stock leveraged ETFs were introduced in the first half of this year, however, products tied to individual companies have increasingly driven growth. That makes the leverage more concentrated. Individual stocks generally move more sharply than broad indexes, meaning the same two-times leverage can expose investors to considerably larger swings. The bets are also overwhelmingly pointed in one direction: up. Inverse leveraged ETFs, which magnify declines in their underlying assets, held just 1.4 trillion won at the end of June, accounting for only 3.5 percent of Korea’s leveraged ETF market. Lee said the imbalance suggests retail investors are using leverage primarily to chase further stock-market gains rather than hedge risk. In short, retailers don't know the rules and stakes in the game. Unpaid stock purchases, in which investors buy shares without immediately settling the full amount, reached 1.4 trillion won at the end of June, up 57 percent from the end of 2024. Contracts for difference, or CFDs, rose 60 percent to 1.9 trillion won over the same period. Margin loans typically provide effective leverage of around two times. An investor putting down a 45 percent margin could lose about 67 percent of their capital if the underlying stock falls 30 percent, and could lose the entire investment if it drops 45 percent. Falling prices can trigger forced selling when collateral drops below required levels. Those sales can push prices down further, setting off a vicious cycle of another round of margin calls. Leveraged ETFs can create a similar problem. Because they target twice the daily return of an asset rather than twice its long-term performance, volatility itself can erode returns. If an index rises 20 percent and then falls 20 percent, it ends 4 percent lower. A two-times leveraged ETF would rise 40 percent and then fall 40 percent, leaving the investor down 16 percent. Fund managers must also continuously rebalance their positions to maintain target leverage. During sharp market moves, large hedging trades can become concentrated near the close, potentially magnifying swings in the underlying stocks themselves. The buildup, Lee claimed, is not simply as an investor-protection issue but increasingly as a financial-stability risk. Tighter restrictions on single-stock ETFs alone could merely push investors toward other leveraged products at home or overseas, the report said, adding that Korea needs to move households away from short-term leveraged bets and toward diversified investment. It recommended stronger tax incentives for Individual Savings Accounts and private pensions, improvements to retirement investment programs and greater benefits for longer stock holding periods, alongside stronger financial education. The warning comes with an uncomfortable twist for a market that has rewarded increasingly aggressive bets. Borrowing helped investors magnify one of the world’s strongest equity rallies. The concern now is what happens when Korea’s heavily leveraged market has to work in reverse. The key improvement is the framing. I would not make the U.S. comparison the whole story. It is your hook. The actual story is: Korea’s bull run has built a layer of leverage underneath it, that leverage has moved into KOSPI heavyweight stocks and semiconductors, and investors are overwhelmingly positioned for prices to keep rising. 2026-08-11 14:07:54
  • Dog days of summer end, so does Koreas dog meat tradition
    Dog days of summer end, so does Korea's dog meat tradition SEOUL, August 11 (AJP) - There are "dog days of summer" for English-speaking societies. Korea likewise has its own pun from ancient calendar for the season’s punishing heat — and this Friday, its final dog day will carry an unusually literal sense of ending. Aug. 14 is Malbok, the last of the three traditional hottest days collectively known as Sambok, or Boknal. It will also be South Korea’s last Malbok before breeding, slaughtering and selling dogs for food becomes a crime. Malbok comes after Ipchu, the traditional beginning of autumn, and falls on the first gyeong day after it. This year’s Malbok falls on Friday, Aug. 14. The meaning of bok itself captures the seasonal struggle. The Chinese character 伏 means to lie prostrate or submit and combines the characters for a person and a dog. In the old East Asian theory of the five elements, summer belongs to fire and autumn to metal. Boknal was understood as the point when the cool force of approaching autumn tried to rise but was beaten back by the lingering power of summer — autumn forced to crouch before the heat. Three times it submits. Hence Sambok, the three bok days. For generations, Koreans answered that heat by eating heat. The idea known as iyeol chiyeol — fighting heat with heat — filled restaurants on Boknal with steaming bowls of samgyetang, chicken soup made with a whole young bird stuffed with glutinous rice, ginseng, jujubes and garlic. For many, particularly older Koreans, there was another restorative soup: bosintang, made with dog meat. That part of Malbok is now disappearing. Under a special law enacted in February 2024, breeding or slaughtering dogs for food and distributing or selling dog meat will be prohibited from Feb. 7, 2027, after a three-year transition period. Slaughtering dogs for food can carry up to three years in prison or a fine of 30 million won ($21,000), while breeding or distributing them for food can lead to up to two years in prison or a 20 million won fine. The law does not criminalize eating dog meat itself. The industry is already vanishing. Of the 1,537 dog farms registered with the government, 1,204, or about 78 percent, had closed by late December 2025, leaving just 333, according to the Ministry of Agriculture, Food and Rural Affairs. It is a remarkable end for a practice documented on the Korean Peninsula for centuries. Xu Jing, a Chinese envoy who visited the Goryeo kingdom in 1123, recorded Koreans eating dog meat and raising dogs much as they did cattle and pigs. For much of modern Korean history, dog meat remained associated less with everyday dining than with stamina food, particularly during the oppressive weeks of Sambok. Its place in Korean society began changing rapidly in the late 20th century. International criticism intensified ahead of the 1988 Seoul Olympics. At home, rising incomes, smaller families and the rapid growth of pet ownership gradually transformed the dog’s place in Korean life — from livestock or guard animal to companion and, increasingly, family member. Today, pet cafes, hotels, restaurants and hospitals are commonplace. Koreans spend heavily on dog food, clothing, grooming and medical care. What many older Koreans once regarded as summer health food has become unthinkable to much of a younger generation. South Korea had an estimated 5.46 million pet dogs at the end of 2024, according to the KB Financial Group Research Institute. Some 11.96 million people lived with dogs, while the broader number of Koreans living with pets reached 15.46 million, or nearly three in every 10 people. “I can’t imagine how we could be so brutal to these precious animals,” said Park Da-yeon, 45, who raises a 2-year-old brown poodle. “Better late than never. I’m glad we are finally past the custom.” The retreat of dog meat has even reshaped Korea’s market for traditional stamina foods. Goat meat emerged as one possible alternative, prompting farmers to expand production, but oversupply and rapidly growing imports have since helped drive domestic live-goat prices down more than 60 percent from two years ago. Across the border, however, the cultural clock is moving in the opposite direction. North Korean state media this month again promoted dog-meat soup, known there as dangogi-guk, or “sweet meat soup,” among nutritious foods to help people cope with the summer heat. Pyongyang continues to celebrate the dish as traditional summer nourishment even as Seoul prepares to eliminate the industry altogether. That divergence gives this year’s Malbok an ending larger than a change in menu. The arrival of Malbok has always suggested that summer’s grip is finally beginning to loosen. The character 伏 evokes autumn’s cool energy lying defeated beneath the heat, waiting for its chance to rise. This Friday, the heat may still win that ancient battle. But for South Korea’s dog-meat tradition, there will be no next Malbok. AJP Takeaways: South Korea’s dog meat ban takes effect Feb. 7, 2027, making Aug. 14, 2026, the country’s final Malbok before breeding, slaughtering and selling dogs for food becomes illegal. Dog meat consumption, once linked to Boknal and summer stamina food, is rapidly disappearing as pet ownership grows and 78 percent of registered dog farms had already closed by late 2025. The shift marks a major cultural divide on the Korean Peninsula: South Korea is ending its centuries-old dog meat industry, while North Korea continues to promote dog-meat soup as a traditional summer food. 2026-08-11 14:07:31
  • Controversy Surrounds Ha-youngs Ancestor Amid Fathers Letter Revelation
    Controversy Surrounds Ha-young's Ancestor Amid Father's Letter Revelation The controversy surrounding actress Ha-young's great-grandfather, Ahn Sang-ho, who is accused of pro-Japanese collaboration, has brought renewed attention to a letter her father sent to her sister.In a letter written in 2002, Ahn Byung-moon, Ha-young's father, addressed his eldest daughter, Kyung-min. He expressed gratitude for the passage of time, stating, "If you think about it, the reason I can talk to you so freely now is that time has been on our side." He also noted, "You may vaguely know, but our family is one of the few prestigious medical families."Ahn detailed his family's medical legacy, mentioning that his great-grandfather served as a faculty member at the predecessor of Seoul National University College of Medicine, and his grandfather was the director of Seongshim Hospital. He reflected on his own career, stating, "After graduating from college in 1976, I trained at my grandfather's hospital and became the head of the training department at the age of 31."In the letter, Ahn referred to the phrase "time is on our side," which appears to acknowledge the improved perception of disabilities over the years. However, this has sparked differing interpretations among netizens, especially in light of the pro-Japanese allegations.Ha-young has previously shared in interviews that her family has been in the medical profession for four generations. However, the allegations regarding her great-grandfather being a pro-Japanese collaborator have led to controversy surrounding her family's background.Ahn Sang-ho was reportedly one of the medical professionals who treated King Gojong during his illness in 1919. Articles from 1918 in the Japanese colonial government’s newspaper, Maeil Sinbo, included statements from Ahn claiming, "I am just like the Japanese people," further intensifying the pro-Japanese controversy.Initially, Ha-young's representatives denied the allegations, stating they were "groundless." However, on August 11, they confirmed that records exist showing Ahn Sang-ho was listed as a member of the Daijeong Club in 1916, a pro-Japanese organization known to include prominent collaborators like Lee Wan-yong.Ha-young's agency expressed that the actress is feeling very burdened by the situation and sincerely apologized for hastily responding with a denial without sufficient verification, which caused confusion.* This article has been translated by AI. 2026-08-11 14:04:00
  • Seongnam Mayor Shin Sang-jin Prioritizes Citizen Safety with Proactive Road Management
    Seongnam Mayor Shin Sang-jin Prioritizes Citizen Safety with Proactive Road Management Seongnam Mayor Shin Sang-jin emphasized on August 11 that the establishment of an AI-based road management platform is a crucial first step towards proactive road management, prioritizing citizen safety.On this day, Mayor Shin held a kickoff meeting for the 'AI-based Road Management Platform Project' at the city hall's first conference room, marking the start of the initiative.The project aims to build a smart road management system utilizing artificial intelligence (AI) and drones, enhancing urban management focused on citizen safety.The core of the initiative is to have AI automatically identify and respond to road hazards swiftly.It will detect potholes, road cracks, and debris in real-time, moving away from traditional complaint-based or patrol-centered road management to a system that proactively identifies and addresses risks.As part of the smart administration initiative led by Mayor Shin, a total of 898 million won will be invested to complete the system by January next year.Notably, AI road hazard information collection devices will be installed in 33 buses and official vehicles to capture road images during operations, allowing AI to automatically analyze hazards.Areas difficult to assess by vehicle will be monitored using drones.The collected data will be integrated with Seongnam's Geographic Information System (GIS) to accurately locate hazards, enabling rapid on-site verification and repairs through a mobile field support system.This initiative aims to shift from 'waiting for citizen reports on road management' to 'AI proactively identifying road issues,' according to Mayor Shin's vision.Local residents are optimistic that this project will enhance safety in their daily lives. A Seongnam citizen stated, "If the city can identify potholes or cracks before citizens report them, it would be much safer. I am hopeful that advanced technologies like AI will be utilized for tangible public safety."Another resident remarked, "Delayed discovery of road damage can lead to accidents, so prompt repairs are crucial. I hope the administration adopts smart technology to identify hazards early and take immediate action."Meanwhile, Mayor Shin stated, "We will actively utilize AI, drones, and data-driven management systems to respond swiftly to road hazards and reduce citizen inconveniences." He added, "We will continue to enhance the efficiency of urban infrastructure management and expand smart administration that citizens can feel."* This article has been translated by AI. 2026-08-11 14:04:00
  • Labor Ministry Hosts Roundtable in Daegu and Gyeongbuk to Reduce Workplace Accidents
    Labor Ministry Hosts Roundtable in Daegu and Gyeongbuk to Reduce Workplace Accidents The Ministry of Labor, along with local governments and labor-management representatives, convened to address the reduction of workplace accidents in small businesses with fewer than 50 employees in the Daegu and Gyeongbuk regions.On August 11, the Ministry of Labor and the Korea Occupational Safety and Health Agency held the 'Daegu and Gyeongbuk Occupational Safety and Health Governance Roundtable' at EXCO in Daegu.According to the Ministry, 96.1% of all businesses in the Daegu and Gyeongbuk area are small enterprises with fewer than 50 employees. This roundtable was organized to explore collaborative measures among local stakeholders to manage areas that are difficult for administrative oversight. Participants included representatives from labor and management, safety and health organizations, local governments from Daegu and Gyeongbuk, and occupational safety and health groups.During the meeting, attendees engaged in in-depth discussions on strategies to reduce workplace accidents in the region. They focused on sharing work information and enhancing joint inspections to mitigate the rising fatalities at small construction sites and logging operations. Additionally, they exchanged views on plans for integrated support projects that link safety inspections, environmental improvements, and training for aging and chemical industrial complexes.Ryu Hyun-cheol, head of the Ministry's Occupational Safety and Health Bureau, emphasized, 'To reduce workplace accidents, both regulation and support—what we call the 'carrot and stick' approach—must work in tandem. Local governments, labor and management, and safety and health organizations should play a pivotal role in connecting policies to small businesses.' He expressed hope that the discussions would serve as a solid starting point for improving workplace safety in Daegu and Gyeongbuk.* This article has been translated by AI. 2026-08-11 14:00:20
  • HD Hyundai Oil Bank Launches First Hydrogen Engine Oil in South Korea
    HD Hyundai Oil Bank Launches First Hydrogen Engine Oil in South Korea HD Hyundai Oil Bank has developed and supplied South Korea's first hydrogen engine oil, targeting the hydrogen mobility lubricant market for commercial vehicle manufacturers.On August 11, HD Hyundai Oil Bank announced that it has supplied the XTeer H2-ICE (Hydrogen Internal Combustion Engine) engine oil, specifically designed for hydrogen internal combustion engines, to hydrogen commercial vehicle manufacturers, including Tata Daewoo.In 2023, HD Hyundai Oil Bank began developing lubricant technology for hydrogen internal combustion engines and completed product development and performance verification using proprietary technology last year.Hydrogen internal combustion engines operate at higher combustion temperatures than traditional internal combustion engines, which can lead to engine wear and oil performance degradation due to moisture generated during combustion. To address these challenges, HD Hyundai Oil Bank has developed technologies for engine protection, moisture control, and sediment suppression during combustion.Hydrogen internal combustion engines are gaining attention as an eco-friendly power source that can replace diesel engines in commercial vehicles and large transport equipment, leveraging existing internal combustion engine production infrastructure and offering shorter refueling times.A representative from HD Hyundai Oil Bank stated, "We have secured lubricant technology specifically for hydrogen internal combustion engines through independent research and development and have reached the commercialization stage. We will continue to expand high-value lubricant solutions aimed at the global market to actively respond to changes in the future mobility sector."Additionally, last month, HD Hyundai Oil Bank opened its flagship store, 'Hyundai XTeer Pangyo,' offering premium lubricant products and engine oil change services.* This article has been translated by AI. 2026-08-11 14:00:20
  • Nvidia Reduces HBM in Next-Gen AI Chip, UBS Predicts Increased Demand and Prices
    Nvidia Reduces HBM in Next-Gen AI Chip, UBS Predicts Increased Demand and Prices Nvidia is expected to see an increase in overall demand for high-bandwidth memory (HBM) next year, despite reducing the memory capacity of its next-generation AI chip, the Rubin Ultra. While the amount of HBM per chip may decrease, Nvidia is anticipated to supply more products, leading to an overall increase in HBM usage.On August 10, Timothy Arcuri, a UBS analyst, stated in a report, "It appears that Nvidia is pursuing a 'de-spec' strategy for the Rubin Ultra specifications." He added, "While the HBM per chip may be reduced, the number of chips distributed across the supply chain could increase, suggesting that total HBM usage in 2027 may exceed previous forecasts."UBS also raised its price outlook for HBM, noting that the supply of HBM4 and the next-generation HBM4E is tighter than expected. The firm explained that memory manufacturers are charging higher prices for HBM, leading to an increase in the average selling price forecast from 67% to 79% year-over-year.Earlier, IT news outlet The Information reported that Nvidia is testing several prototypes of the Rubin Ultra with less HBM than originally planned. Some products are reportedly being considered with memory capacities reduced to 192GB or 256GB, or using HBM4 instead of HBM4E.The consideration to reduce memory capacity is driven by concerns over HBM supply shortages. Nvidia is testing various specifications in anticipation of potentially not securing enough HBM4E in time for the Rubin Ultra's release. The final specifications have yet to be confirmed.If UBS's predictions hold true, the reduction in HBM capacity for the Rubin Ultra may not significantly impact memory manufacturers such as SK Hynix, Samsung Electronics, and Micron. Although the HBM usage per product may decrease, the overall shipments of AI semiconductors and HBM prices could rise together.* This article has been translated by AI. 2026-08-11 13:56:00
  • Kookmin shrinks self-driving AI to run inside cars
    Kookmin shrinks self-driving AI to run inside cars SEOUL, August 11 (AJP) - A self-driving car has to work out where every other vehicle, pedestrian and obstacle around it sits in three-dimensional space, and it has to do so many times a second on a computer bolted inside the car rather than in a data center. A South Korean university team says it has found a way to shrink the software that does the recognizing without losing accuracy. Kookmin University said Tuesday that two master's students in its artificial intelligence and software department, working with Hyundai Motor Company, had developed a compression method called SharedKD for the three-dimensional object detection models used in autonomous driving. Cho Hyun-jun and Ahn Sang-ho carried out the work in the research group of Kim Jang-ho, and the paper was presented in July at the Design Automation Conference in Long Beach, California. The problem the method addresses is a squeeze between two demands that pull in opposite directions. Detection models grow more accurate as they grow larger, but a car cannot carry a rack of servers, and a model that takes an extra fraction of a second to produce an answer is a model that has seen a hazard too late. Anything that runs on a vehicle has to fit within a fixed budget of processing power, electricity and heat. The standard fix is a training technique called knowledge distillation. Engineers take a large, accurate model, call it the teacher, and use its outputs to train a much smaller model, the student, so the small one learns to imitate the big one's judgments rather than learning from raw data alone. The result is a model that runs on modest hardware while behaving more like its oversized parent than its size would suggest. Distillation normally requires building and training two separate models. SharedKD does away with the second one. The full network serves as the teacher, and a subnetwork carved out of that same network by pruning, which means switching off connections judged to be doing little work, serves as the student. During training, the system uses gradients, the signals that tell a neural network how much each part of it is contributing to the final answer, to decide which parts to keep. The choice is made continuously as training proceeds rather than fixed in advance. The practical difference is one of sequence. Compression is usually something done to a model after it has finished training, a trimming of a completed object. SharedKD looks for the deployable small model at the same time the large one is being trained, and the two are set up so that each improves the other's learning. Kookmin said the approach cuts both the amount of arithmetic a detection model performs and the time it takes to produce a result, and expects it to be applied in vehicle systems and in edge AI, the general term for artificial intelligence that runs on a device rather than sending data away to be processed. How much it cuts has not been made public. The university released no performance figures for SharedKD, named no baseline model or test dataset for comparison, and did not say whether the method has been run on automotive hardware or only in the laboratory. Neither Kookmin nor Hyundai has described any plan to put it in a production vehicle. Model compression is Kim's own specialty. He joined Kookmin in September 2022 from Naver Webtoon's AI Research Lab, where he worked on meta-learning, and his doctoral research dealt with the tendency of deep learning models to become unwieldy as they become more capable. Kookmin said the project reflects its KMU Vision 2035: EDGE strategy, which designates eight areas for concentration, and that the work sits where two of them meet, the AI+X track and the mobility track. The Design Automation Conference (DAC) is the main annual gathering for the design of electronic circuits and systems, sponsored by the Association for Computing Machinery and the Institute of Electrical and Electronics Engineers. This year's edition, the 63rd, ran from July 26 to 29 at the Long Beach Convention Center, and organizers said more than half of the program dealt with artificial intelligence. 2026-08-11 13:53:56
  • Investment Barriers Increase for Single-Stock Leveraged ETFs in South Korea
    Investment Barriers Increase for Single-Stock Leveraged ETFs in South Korea Individual investors face higher barriers to entry for single-stock leveraged exchange-traded funds (ETFs) and exchange-traded notes (ETNs) in South Korea. This change comes as the minimum deposit requirement has been raised and new investors are now required to complete simulated trading before they can invest.According to the Korea Exchange, starting August 19, individual investors trading single-stock leveraged and inverse ETFs and ETNs for the first time will be required to complete a mandatory simulated trading course. Securities firms are currently informing their clients about this new regulation.New investors must complete at least five hours of simulated trading over a minimum of five trading days, spending one hour each day. After completing the course, they must register the relevant information with their brokerage and obtain approval before they can purchase actual products.However, existing investors are exempt from this requirement. Anyone who has traded single-stock leveraged products at least once between May 27, when these products were listed, and August 18 is not required to complete the simulated trading. Professional investors, corporations, and foreign investors are also excluded from this mandate.The simulated trading system will be operational starting August 19. Given the five-day completion requirement, the first confirmations of course completion will be available from August 24. Additional time of one to two business days may be needed for registration and approval by the brokerage.This measure is a follow-up to investor protection initiatives announced by financial authorities amid concerns over excessive speculation in single-stock leveraged products. On July 29, during a market situation review meeting, the authorities introduced additional regulatory measures for these products.Among the measures proposed were the mandatory simulated trading, setting investment limits per account, imposing excessive order fees, and implementing emergency market stabilization measures. The mandatory simulated trading requirement is the first of these measures to be implemented.Previously, the minimum deposit requirement was significantly increased. As of July 31, the minimum deposit for single-stock leveraged ETFs and ETNs was raised from 10 million won to 30 million won in cash. With the increase in the minimum deposit and the addition of the simulated trading requirement, protective measures for individual investors in high-risk leveraged products are being strengthened.* This article has been translated by AI. 2026-08-11 13:52:00
  • Koreas Ministry of Land Requires Disclosure of Shared Management Fees in Rental Contracts
    Korea's Ministry of Land Requires Disclosure of Shared Management Fees in Rental Contracts Starting August 28, real estate agents in South Korea will be required to confirm and explain the amount of shared management fees when facilitating rental contracts for one-room apartments and officetels.The Ministry of Land, Infrastructure and Transport announced on August 11 that a partial amendment to the Enforcement Decree of the Real Estate Agents Act was approved during a Cabinet meeting, and the revised regulations will take effect on the same date.This amendment follows the revision of the Real Estate Agents Act, which grants legal status to the Korea Association of Realtors, and aims to enhance transparency in management fees for small housing units.With the legal recognition of the Korea Association of Realtors, the legal name 'Korea Association of Realtors' will be reflected in subordinate regulations, and provisions necessary for the operation of the association, including organizational management and executive composition, will be established.As the association transitions from a voluntary organization to a legal entity, its existing charter will be systematically revised. Ethical regulations regarding professional conduct that members must adhere to will also be established with the approval of the Minister of Land, Infrastructure and Transport.The obligation to confirm and explain management fees will also be strengthened. Previously, it was often difficult for tenants to verify management fee information for small housing units like one-room apartments and officetels, especially when there was no separate management entity. Concerns had been raised about excessive increases in management fees, which could circumvent rental costs, due to the lack of detailed information on expenses for common areas.Going forward, real estate agents will need to confirm and explain the amount of shared management fees in addition to the total management fees. Shared management fees refer to the sum of costs that cannot be individually verified by household usage, excluding fixed costs such as TV reception fees and internet charges.As instances of management fees being effectively used like rent in the rental market increase, the process of clearly verifying the structure of management fees before contracts can serve as a protective measure for tenants.The method for determining brokerage fees for residential officetels will also be clarified. While brokerage fees for residential and non-residential properties are decided through consultation with clients within a set maximum rate, there had been confusion regarding the interpretation of the maximum rate for residential officetels.The amendment clarifies that brokerage fees for residential officetels will also be determined through consultation between the client and the real estate agent. This applies to officetels with a dedicated area of 85 square meters or less, equipped with a dedicated kitchen, a dedicated flush toilet, and bathing facilities.Shin Yoon-geun, Director of Land Policy at the Ministry of Land, Infrastructure and Transport, stated, “With the Korea Association of Realtors becoming a legal entity, we expect improvements in the qualifications and ethical awareness of real estate agents, allowing them to become a trusted institution for the public.”He added, “This amendment to subordinate regulations will enhance consumer benefits by providing management fee information in advance during the housing lease contract process, and we will continue to identify areas for improvement for the development of the real estate industry and the benefit of the public engaging in real estate transactions.”* This article has been translated by AI. 2026-08-11 13:48:00