The government will in principle bar multi-home owners from extending mortgage maturities on apartments in the Seoul metropolitan area and other regulated zones starting April 17. The hardline measure comes roughly six weeks after President Lee Jae-myung raised concerns over loan extensions for multi-home owners via X (formerly Twitter) in mid-February. According to the Financial Services Commission (FSC), roughly 17,000 households hold bullet-repayment mortgages totaling about 4.1 trillion won ($3 billion), of which 12,000 households — worth 2.7 trillion won ($2 billion) — have maturities falling due this year. Exceptions will be granted where tenants are present, allowing extensions until the lease contract expires, but the majority of outstanding loans could be affected.
FSC Chairman Lee Eok-won said Tuesday, "Speculative loan demand leveraging debt has been stimulating the housing market. We must break this vicious cycle and shed the stigma of being a ruinous real estate republic." He made clear that the focus of the household loan management measures is the eradication of real estate speculation. Alongside the ban on loan extensions for multi-home owners, the financial authorities also blocked indirect channels for raising housing funds through business loans or peer-to-peer (P2P) online lending.
The measures may yield partial results, such as pushing leveraged multi-home owners to list their properties on the market. However, critics warn that over the long term they could shrink the supply of jeonse (lump-sum deposit lease) properties and accelerate the shift toward monthly rent. According to Asil, a real estate data provider, jeonse listings in Seoul stood at 16,788 as of the end of last month, a 27.2% plunge from January. Monthly rent transactions over the same period surged to 177,115 — a 29.6% jump from the five-year average — indicating the shift from jeonse to monthly rent is accelerating. With strong consumer preference for apartments persisting, there is concern that pressuring multi-home owners to unclog the sales market could instead raise housing costs for homeless lower-income households and amplify market anxiety.
The paramount goal of real estate policy should be stabilizing housing for ordinary citizens, not punishing multi-home owners and speculators. An approach that effectively forces multi-home owners to sell through a barrage of regulations — designating all of Seoul as a land transaction permit zone, tightening lending rules, imposing heavier capital gains taxes, and signaling higher holding taxes — is not sustainable. Policymakers must not forget that genuine market stability begins with supplying sufficient quality housing in areas where end-users actually need it.