Who is truly responsible for Korea’s housing crisis?

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Who is truly responsible for Korea’s housing crisis?

Published: 06 Feb. 2026, 00:02

Audio report: written by reporters, read by AI

Lee Sang-ryeol

The author is a senior editorial writer at the JoongAng Ilbo.

Owners of multiple homes have long been an easy political target in Korea. Households without homes or with only one home make up the majority of voters. Politicians frequently frame owners of multiple homes as speculators who drive up housing prices, turning them into convenient public adversaries. Political reality often revolves around attacking perceived enemies, which explains why policies targeting owners of multiple homes have repeatedly taken priority in government housing measures. Yet aside from a small number of aggressive speculators, most owners of multiple homes have personal or economic reasons for owning additional properties. These include inheritance, investment or operating rental housing businesses. In some cases, siblings who jointly inherit property face difficulties selling it. Regardless of motivation, such owners also supply rental housing and help stabilize lease markets.

President Lee Jae Myung listens to remarks by Deputy Prime Minister and Finance Minister Koo Yun-cheol (right) on the end of the temporary suspension of heavier capital gains taxes on owners of multiple homes during the fourth Cabinet meeting held at the main building of the presidential office at the Blue House on Feb. 3. [JOINT PRESS CORPS]

The government has decided to end the temporary suspension of heavy capital gains taxes on owners of multiple homes. During the process, owners of multiple homes have once again been portrayed as primary contributors to surging housing prices, reinforcing support for punitive tax measures. What remains disappointing is that deeper discussion about whether higher capital gains taxes actually stabilize housing prices has been largely overshadowed. The tax policy has effectively become an unquestioned approach under the current administration.

The heavy capital gains tax on owners of multiple homes was first introduced in 2004 under the Roh Moo-hyun administration. It was later suspended or abolished under the Lee Myung-bak and Park Geun-hye administrations, reinstated under Moon Jae-in, suspended again during the Yoon Suk Yeol administration and is now set to return as the suspension expires. Progressive administrations have tended to implement the policy, while conservative governments have typically eased or abolished it.

Housing prices have fluctuated sharply during this period. According to KB Real Estate data, Seoul apartment prices surged 55.7 percent under Roh Moo-hyun, declined 4.5 percent during Lee Myung-bak, rose 10.2 percent under Park Geun-hye and soared 61.9 percent under Moon Jae-in. Prices then fell 6.4 percent under Yoon Suk Yeol before rising again by 8.1 percent under the current administration from June 2025 through January 2026. Notably, housing prices surged during progressive administrations that enforced heavier capital gains taxes and stabilized or declined during conservative administrations that relaxed them. While housing prices are influenced by multiple factors including economic growth, interest rates, credit availability and taxation, heavier capital gains taxes appear to have contributed to supply constraints by discouraging owners of multiple homes from selling properties.

President Lee Jae Myung recently argued on social media that individuals purchasing multiple homes have driven prices and rents to unsustainable levels, discouraging marriage and childbirth. Although rising housing prices undoubtedly impose severe burdens on younger generations, attributing price increases solely to owners of multiple homes oversimplifies complex market dynamics.

Market analysts point to several other major drivers behind rising housing prices under the current administration. First is declining housing supply: In Seoul alone, new housing completions are projected to fall to 29,161 units this year, down 31.6 percent from 42,611 units last year, according to Real Estate R114. Another driver is growing market anxiety. Regulatory pressure on owners of multiple homes has intensified demand for what buyers call a “smart single home,” referring to the strategy of concentrating assets in one high-value property. This phenomenon reflects how households adapt to government tax and housing policies while anticipating continued price increases due to limited supply.

Market distortions also play a role. After the government introduced the Oct. 15, 2025, measures that expanded land transaction permit zones and tightened market regulations, concerns quickly emerged about shrinking rental housing supply. As expected, available jeonse (lump-sum deposit) properties declined sharply. The resulting shortage has pushed many renters to pursue aggressive borrowing to purchase homes.

A bird's eye view of apartments in Nowon District, northern Seoul, on Jan. 29. [NEWS1]

Korea’s housing policy failures across successive administrations share several consistent lessons. First, tax increases alone rarely control housing prices. Second, housing markets cannot stabilize without sufficient supply. Third, urban housing supply cannot expand meaningfully without easing redevelopment and reconstruction regulations. Despite these recurring lessons, governments continue to return to policies that have repeatedly produced limited results.

The ongoing debate raises fundamental questions about accountability for Korea’s housing crisis. Policymakers must consider whether existing approaches genuinely aim to stabilize housing prices or are simply a response to political pressures. Without confronting structural supply shortages and market distortions, housing instability is likely to persist regardless of tax policy changes.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.