MoneyLog｜부동산·경제 인사이트

Korea’s housing market is entering a phase where simple predictions no longer work. Transactions are declining, yet prices in key districts remain firm—or even rise quietly. This disconnect makes the market feel uncertain, especially for buyers and investors trying to time their next move.

But when we break the market down into three core signals—Supply, Power of Money, and Transaction Volume— a clearer picture begins to emerge. These signals don’t act alone; they interact and reinforce each other, shaping the direction of the next housing cycle.

With supply collapsing from 2026, jeonse prices rising for more than 34 consecutive weeks, and transaction activity frozen by tightened regulations, the data points strongly toward a market where polarization will intensify. 

 Understanding these shifts will help you recognize when opportunities open—and when risks grow.

Let’s explore these signals one by one and uncover what they mean for the years ahead.

In any market, there is a fundamental element that determines long-term stability. In real estate, that foundation is supply. Seoul needs around 50,000–80,000 new homes each year, yet current supply levels fall far short of this benchmark.

Construction costs have surged—from 5.78 million KRW per pyeong in 2021 to 9.9 million KRW in 2025—while high interest rates have weakened the financial viability of new projects. As a result, many developers faced bankruptcy risks, and new housing starts dropped sharply from 2023 to 2025.

This weakened supply backbone will play a decisive role in shaping housing prices over the next several years.

Even in a weak market environment, prices remain surprisingly firm. This is largely due to the power of money—the financial forces that influence housing behavior.

With fewer jeonse listings and restrictions on gap investment, jeonse prices have risen for 34 consecutive weeks in 2025. As the price gap between jeonse and sale prices narrows, more renters feel pressure to transition into buyers.

However, the upward pressure has limits. Korea’s household debt is among the highest in the world—103.8% of GDP—making another “all-in boom” like 2020 unlikely.

High exchange rates around 1,474 KRW/USD prevent the Bank of Korea from lowering interest rates easily. As a result, mortgage rates may remain near their current peak for an extended period.

The result is a period of “poor-quality appreciation”, where prices hold up not because fundamentals are strong, but because financial constraints distort supply and demand.

The third signal—and often the trigger for major market shifts—is transaction volume. Right before the October 2025 policy announcement, last-minute demand briefly pushed transactions upward. However, in November, volume collapsed by about 70%.

This sharp decline was driven by heavy regulation introduced on October 15, which turned all of Seoul into a regulated zone:

Yet average prices rose 8% despite a 77% drop in transactions. This is a classic statistical illusion.

In markets like this, transaction volume becomes a much more reliable indicator than nominal price movements.

From 2026 onward, the fate of the housing market depends largely on exchange rate stability and the Bank of Korea’s monetary stance. Combining these with the looming supply cliff yields three possible scenarios:

From 2026 onward, the housing market will not move uniformly. Supply shortages, rising jeonse prices, tightened regulations, and exchange-rate uncertainty will create a structure where market power concentrates in the top 10–20%.

Regardless of which scenario plays out, the overarching direction is clear: extreme polarization.

The key turning point will likely emerge when exchange rates stabilize and rate cuts become feasible—possibly in mid-2026. That moment is when opportunities will open for those who have prepared.

Until then, watching policy signals, liquidity trends, and regional disparities will be more important than short-term price movements.

Today’s real estate market cannot be understood through simple up-or-down predictions. With supply shortages, rising jeonse prices, strengthened regulations, and global financial pressures, the gap between prepared and unprepared households will widen.

Yet, uncertainty often brings opportunity. When exchange rates stabilize and interest-rate cuts become possible, that moment may be the opening of the door. Those who have prepared early—studying the market and securing liquidity—will be the ones who can move first.

I hope this article helps you build your own criteria for deciding when and how to act in the market ahead. If you found this helpful, please consider sharing it. Your support motivates us to continue delivering valuable insights.

See you again in the next analysis.