00:03You're listening to A.I. Prism from Seoul Economic Daily.
00:06Imagine waiting a quarter to century for a new home, only to realize the government's new rulebook just changed your
00:12math overnight.
00:13You are likely trying to figure out whether now is the time for you to buy and whether today's rules
00:19change your loan limit.
00:20It's Friday, July 3. Let's look at what's happening in Korea's property market.
00:25We are looking at a massive tug of war right now.
00:29The market is kind of caught between these long-term supply approvals and, well, immediate regulatory constraints that are actively
00:37choking demand.
00:38It's an incredibly confusing time for anyone trying to navigate these waters.
00:42Right. I mean, Seoul approved Daishidong's Unma Complex rebuild into 5,850 units.
00:48Which is, you know, huge on paper.
00:49It is. But I have to push back here.
00:52Does this 2028 groundbreaking target act as real supply relief for you as a buyer today?
00:57Or does it merely shift market sentiment after a, you know, 25-year wait?
01:02It's almost entirely about sentiment for the immediate future.
01:05I mean, the physical relief, actual keys and doors, that's years away.
01:08Right.
01:08If you're looking to buy right now, a 2028 groundbreaking doesn't give you a place to live today.
01:14What actually changes the math for you today is the regulatory side.
01:19The June 30 designation of Dongtan, Giheng, and Giri as regulated zones tightens mortgage and purchase rules for buyers immediately.
01:27And the mechanism there is, like, so vital to understand.
01:30By designating those zones, the government restricts how much banks can lend you, essentially capping your purchasing power.
01:36Right. But the market didn't cool down.
01:38It just moved sideways.
01:39Yeah, exactly like squeezing a water balloon.
01:42You clamp down on Dongtan, and the water just bulges out into the unregulated areas overnight.
01:47I mean, Suan asking prices jumped $70 million, won roughly $45,000 USD to $850 million won, or about $550
01:55,000 USD, in a single day as buyers shifted to unregulated zones.
02:00Exactly. And this balloon effect happens every single time we apply breaks district by district instead of, you know, addressing
02:06macro supply.
02:07So chaotic for a buyer.
02:09It is. And if you follow a buyer's dilemma, you might look at that spillover and think, well, buying is
02:13too chaotic right now. I'll just wait it out and rent.
02:16Using the Jansi system.
02:17Right. Handing over that massive lump sum deposit.
02:20But the math gets really tough here.
02:22Soljian's deposits rose 5.0% this year, sitting right against the 5.1 of 1% game in sale
02:29prices.
02:30Oh, wow. So the cost to rent via a lump sum deposit is climbing just as fast as the cost
02:35to own.
02:36Yeah, exactly. You'd be a premium either way.
02:38That traditional advantage of parking money in Jansi's to save up, that's just vanishing.
02:43Plus, you have to factor in taxes.
02:44The OECD's 2026 Korea survey states property tax revenue is at 3.80% of GDP double the OECD average.
02:52Double. And we need to explain why that matters.
02:55A massive chunk of that revenue isn't from holding the property, it's from transaction taxes.
03:00Right. The taxes when you buy or sell. High transaction taxes create this lock-in effect.
03:05If it costs a fortune to sell, you just refuse.
03:07Owners, hold on. Starving the market of supply.
03:10So considering all of this, how does the OECD's recommendation to shift away from transaction taxes
03:15alter the rent versus buy calculus for someone trying to make a decision?
03:18Regulated zone loan limit rules hurt immediate buyers in targeted districts while pushing price pressure into neighboring areas within days.
03:25A 5.1% cumulative rise in 2026 June deposits essentially matches sale price gains, rapidly eroding the financial advantage
03:33of waiting in a deposit lease.
03:35Buyers weighing if now is the time to buy must factor in the OECD recommendation to cut Korea's 50.4
03:41% transaction tax share.
03:42It really makes you wonder if those transaction taxes actually do get slashed.
03:46Will a wave of long-held properties suddenly flood the market and rewrite the entire supply equation all over again?
03:52That's today's AI Prism, real estate.
03:54This episode was produced with AI assistance based on Seoul Economic Daily reporting and reviewed by a human editor.
04:00AI Prism is a one-Eifra award-winning series.
04:03We'll be back tomorrow.
04:04Hashtag Co-SPI.
04:05You've been listening to AI Prism from Seoul Economic Daily.
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