As the government's stringent loan restrictions shake the housing ladder for young people and ordinary households, the inheritance and gifting of high-priced apartments has increased. According to data obtained by The Seoul Economic Daily on Tuesday from the office of Rep. Kim Jong-yang of the People Power Party, the share of loans in funds used to purchase homes in Seoul's three Gangnam districts—Gangnam, Seocho and Songpa—plunged from 19% in 2024 to 12% in January to April this year, while the share of inheritance and gift funds rose from 3.9% to 7.2%. With loans blocked, high-income young people who lack assets are seeing their chances of climbing the housing ladder shrink, while children of the wealthy are inheriting expensive apartments through "parent privilege." The "opportunity gap" widened by government regulation is, in effect, fueling asset polarization.
The burden of the real estate regulations that began with the June 27 measures last year is concentrated on the propertyless ordinary public and young people. The fallout from regulations on multi-home owners has sharply reduced jeonse (a Korean lease system requiring a large lump-sum deposit instead of monthly rent) listings and driven up rental prices, while financing for home purchases has also become difficult, leaving the housing ladder malfunctioning. According to the Korea Real Estate Board, Seoul's average housing jeonse price index rose 0.91% last month from the previous month, the largest increase since October 2013. Seoul's monthly rent price index also jumped 0.81%, a record high. Nor have home prices been brought under control. Seoul's average home sale price exceeded 1 billion won for the first time since statistics began, and expectations of further price increases have grown. With the stepping stone of loans weakened, the path to homeownership for the propertyless who have no assets to inherit has grown even more distant.
Even so, the government appears poised to tighten its grip further. Koo Yun-cheol, deputy prime minister and minister of economy and finance, said Tuesday that "there is no need for the government to give incentives even to multiple homes and non-resident homes," signaling stronger regulation through a tax reform at the end of July. In the market, there are also loud voices of concern about tightening jeonse loans. Over the past year, as the Lee Jae-myung administration's real estate regulations focused on suppressing demand poured out, ordinary people fell into housing insecurity while the wealthy hurried to pass down their fortunes. It has already been confirmed that tax and financial regulations that brand even diligent citizens as speculators do more harm than good. The government surely knows that the fundamental solution for stabilizing real estate is, ultimately, an adequate supply of housing.
