"Five first-generation new towns have a total of 292,000 housing units. Bundang alone has 97,000 units. To meet the goal of supplying 1.35 million units in five years, we would need to build 14 times the number of units in Bundang," said Kwon Dae-jung, Chair Professor of Economics and Real Estate at Hansung University, during a panel discussion at the '2026 Real Estate Policy Forum' held at the Korea Press Center in Seoul on June 24.
The discussion highlighted the need for immediate short-term supply measures to fill the current housing gap alongside long-term supply goals. It was emphasized that public land and large-scale redevelopment projects take time to complete, necessitating parallel strategies to normalize private supply of non-apartment housing, officetels, and small urban homes. The timing and pace of supply that the market can feel are as crucial as the scale of the supply goals.
Ko Jong-wan, head of the Korea Asset Management Institute, assessed the real estate policy of the Lee Jae-myung administration in its first year as a "half success." He noted, "While there are tax policy directions and long-term supply plans, sites like Taereung and the Military Manpower Administration have yet to break ground. There is a lack of policy coordination with the Seoul city government, and resident opposition remains unresolved."
He expressed concerns that the structure, which takes 4 to 5 years from groundbreaking to occupancy, makes it difficult to feel the effects of supply during the administration's term. According to Ko, statistics from the Ministry of Land indicate that while there are 4.16 million households in Seoul, there are only 3.91 million housing units, resulting in a shortage of 250,000 units. He stated, "The instability in lease prices ultimately stems from a lack of housing."
To achieve supply goals, Ko argued for more robust measures. He referenced the 200,000 housing unit supply during the Roh Tae-woo administration and the lifting of greenbelt restrictions under the Lee Myung-bak administration, stating, "Without groundbreaking and creative measures, it will be difficult to see effective supply expansion." He also suggested that the Seoul city government and the Ministry of Land should hold regular consultations and disclose annual supply plans by living zones.
As short-term supply alternatives, he proposed easing regulations on non-apartment housing and officetels. Ko pointed out that the burden of donation for shared housing and town projects is significant, and gaining resident consent is challenging. He called for an integrated support system that includes providing standard architectural designs, relocation cost assistance, and project financing. Regarding officetels, he suggested changing the structure where owning just one unit counts as owning two homes, which could facilitate short-term supply using small plots of land.
Nam Hyuk-woo from the Korea Bank Real Estate Research Institute identified liquidity as a key variable in the current market and stressed the need for supply expansion. He stated, "There is a significant amount of idle funds that can flow into real estate from performance bonuses or stock profits at any time," emphasizing that the focus should be on supply. He warned that policies solely aimed at suppressing demand would not guarantee market stability and that policies to enhance supply credibility must be implemented concurrently.
Nam also explained that there is existing private demand for non-apartment housing, particularly officetels. He noted, "Officetels in prime locations near subway stations are in high demand not only from single-person households but also from newlyweds." However, he pointed out that the burden of capital gains and property taxes discourages private supply initiatives. As an alternative, he suggested tax relief based on publicly assessed values or area criteria.
Regarding the reduction of long-term holding tax exemptions for non-resident homeowners, Nam expressed concerns about potential side effects. He warned, "If elderly owners in Gangnam start moving in themselves and evicting tenants, the rental supply in that area will decrease while tenant demand increases, leading to greater volatility in lease prices." He stressed the need to consider the impact of tax reforms on both the sales and lease markets.
Yoon Sung-jin, an associate research fellow at the Korea Research Institute for Human Settlements, emphasized that increasing non-apartment supply should focus not only on quantity but also on quality and stability. He questioned whether simply increasing building heights and relaxing parking regulations is the right approach to boost supply, urging consideration of whether the housing meets the standards of a society with rising income and assets.
On the issue of lease fraud, Yoon called for strengthening the role of guarantee institutions and improving regulations. He stated, "It is virtually impossible for ordinary tenants to completely avoid lease fraud," highlighting vulnerabilities such as changes in landlords before or after guarantee approval. He proposed the establishment of an intermediary body to detect risks associated with properties.
Lee Yoo-ri, head of the Housing Policy Division at the Ministry of Land, Infrastructure and Transport, responded to criticisms that government supply policies have been overly public-led. She explained, "From 2022 to 2024, construction costs have risen by over 30%, and with project financing being blocked, the supply foundation was too weakened to leave it solely to the private sector. Our aim was not to exclude the private sector but to work in tandem with it."
Lee noted that many regulatory relaxations and procedural simplifications aimed at revitalizing private supply are included in related legislation, which will be implemented upon passage. Regarding the shortage of non-apartment supply, she stated, "We are focusing on non-apartment housing to overcome the sharp decline in occupancy expected in 2026 and 2027. The activation of supply for goshiwons (small boarding houses) and living accommodations, as well as the announcement of special guarantee products for non-apartment housing, are part of this effort." She concluded, "We will continue to pursue policies that instill confidence in the market regarding supply."
* This article has been translated by AI.
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