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Breaking the grip of Korea’s one-house obsession

Published: 02 Jun. 2025, 00:03

Ha Hyun-ock

The author is an editorial writer at the JoongAng Ilbo.

“100 million won per pyeong [3.3 square meters] in Gangnam, 100 million won for a whole apartment in the provinces.”

The headline, though staggering, is not an exaggeration. Korea’s real estate market is no longer merely polarized — it is entering a phase of extreme disparity. According to KB Real Estate’s latest monthly housing price survey, the average price per pyeong (a traditional Korean measurement) of apartments in Seoul’s Gangnam District surpassed 100 million won in April for the first time since records began in 1986. Compared to the previous year, prices rose nearly 20 percent.

According to the Korea Real Estate Board, apartments accounted for the highest-ever share of housing transactions in the first quarter of 2024. The photo shows a residential area in Seongbuk District, central Seoul, densely packed with apartments, multiplex homes and villas. [YONHAP]

In contrast, the average sales price of apartments in the lowest 20 percent bracket nationwide was about 115 million won. Even the average for Seoul’s lowest bracket stands at roughly 490 million won. The numbers confirm a stunning reality: The market is splitting between a few premium zones and everywhere else.

As of April, the average apartment in Seoul was priced at 1.33 billion won, enough to buy more than three apartments in one of Korea’s six metropolitan cities, where the average price is around 367 million won. Even within Seoul, inequality has worsened. The ratio between the top 20 percent and bottom 20 percent of apartment prices in the city has now reached six to one.

Driving this hyperpolarization is the surge in demand for what Koreans call ttolttolhan han chae — roughly, a “smart single home,” or a strategically chosen, high-value property. This demand was an unintended consequence of housing policies under the Moon Jae-in administration, which emphasized the principle of “one household, one home.” The approach targeted owners of multiple properties, blaming them for distorting supply and inflating prices, despite the fact that the nationwide housing supply rate exceeded 100 percent.

Under Moon’s policies, owners of multiple homes were hit with higher taxes at every stage — acquisition, ownership and sale. Loan restrictions were tightened, housing subsidies were blocked and benefits for registered landlords were rolled back. The administration anticipated that by cornering owners of multiple homes, they would release more properties into the market, bringing prices down.

But the market responded only partially as expected. Multi-homeowners did sell — mostly offloading properties in the provinces, or nonapartment types such as multifamily buildings and officetels. However, instead of exiting the market, many repositioned themselves as single-homeowners by reinvesting in one high-performing, high-value property. The result was an intensified demand for top-tier homes, accelerating polarization.

Fueling this shift was the tax code. In the name of supporting single-homeownership, the system offered breaks that ignored the actual value of properties. For example, owning a single apartment worth 1.2 billion won incurred no comprehensive property tax, while someone with three properties worth 300 million won each would be taxed. With presidential candidates pledging to further ease taxes for single-homeowners, the trend only deepened.

Gangnam, already the most expensive area in Korea, has become a gravitational black hole in the housing market. Demand is no longer simply for apartments, but specifically for large, newly built complexes in Gangnam. One notable transaction in March saw an 84-square-meter (904-square-foot) unit in Raemian One Bailey in Banpo sell for 7 billion won — crossing the threshold of 200 million won per pyeong for the first time in a standard apartment size.

The resulting cycle is vicious: The popularity of premium locations leads to demand concentration, which invites tighter regulations, which increases scarcity and further drives up prices. As Gangnam continues to surge, it pulls up property prices across Seoul and the greater metropolitan area. Meanwhile, provincial housing markets and nonapartment sectors are collapsing. With multi-homeowners gone, demand for villas has plummeted. Rental scams have proliferated as jeonse (Korea’s lump-sum rental system) deposits inch closer to property values, and monthly rent continues to rise.

To address these cascading problems, the government is exploring partial remedies. On June 4, short-term leases for nonapartment units such as single-family homes, townhouses and multiplex housing will be reintroduced. Other proposals include excluding provincial properties from primary residence calculations or allowing dual-address registration. Yet these are patchwork solutions that continue to cling to the one-house-per-household ideal.

An apartment complex and villas in central Seoul are seen from Mount Namsan on Feb. 2. [YONHAP]

A more effective solution may lie in shifting tax policy away from home count and toward total assessed property value. Such a move could help diffuse the obsession with “one perfect home” and redirect demand across a broader range of housing options. It is uncertain whether previously penalized multi-homeowners would reenter the market under a reformed system. But what is clear is the need for bold rethinking.

The time has come to abandon the illusion of “one household, one home” as a universal truth. Acknowledging past policy failures is the first step toward building a more equitable and functional real estate market. Korea must now summon the courage to dismantle the monster it inadvertently created.

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.