"Real Estate Top Instructor" Oh Sehun: "Seoul’s Construction Will Not Stop"

Three Major Supply-Oriented Solutions:
Redevelopment, Private Rentals, and Tax Reform

Sehun Oh, Mayor of Seoul, has released a video analyzing the triple increase in sale, jeonse (key-money deposit), and monthly rent prices in the Seoul real estate market, and subsequently presented concrete solutions to enhance housing stability for Seoul residents and to expand housing supply.

'1ta Market Oh Sehoon' Part 2 Video Photo. Seoul City

On the afternoon of July 16, the city released the video "One Hit Market Part 2: The Real Estate Prescription Delivered to the Lee Jaemyung Administration - Here’s How to Solve Real Estate Hell," on the official Seoul Mayor website and its social broadcast, Live Seoul.

While the first video analyzed the reasons behind simultaneous price hikes in sales, jeonse, and monthly rents—namely, demand suppression and supply regulations—this latest video focuses on transitioning government policy to normalize housing supply, along with Seoul City's specific action plans.

Mayor Oh emphasized, "The aim is not to lift all regulations, but rather to block speculation while relaxing regulations that restrict housing supply." He stressed, "We must shift the foundation of real estate policy from demand suppression to supply-oriented measures."

9 out of 10 Newly Built Homes Are Private... Easing Redevelopment/ Reconstruction Rules to Restore the Supply Cycle

The first recommendation presented by Mayor Oh is aggressive housing supply focused on private redevelopment led by private companies—referred to as "Just Supply, No Debate."

He explained that since around 92% of new homes completed in Seoul over the past three years were supplied by the private sector, deregulation and supply promotion measures, traditionally centered on the public sector, must also be extended to the private redevelopment and reconstruction sector.

The city recommended to the central government that the LTV (loan-to-value) ratio for relocation loans in redevelopment projects be raised to 70%, and that restrictions on member equity transfers in redevelopment and reconstruction associations be temporarily relaxed for three years. Additionally, the city proposed relaxing the maximum legal floor area ratio for private redevelopment projects by up to 1.2 times, and lowering the requirement for providing rental housing in redevelopment from the current 50% to the same 30% level as reconstruction, thereby improving business viability.

Mayor Oh stated, "Over the past five years, the average annual housing starts for redevelopment in Seoul have dropped from 29,000 to 15,000 compared to the previous five years." He argued that, "We will only see additional supply if business feasibility is ensured, so raising LTV caps, temporarily relaxing association member equity transfer rules, and relaxing floor area ratios will help unblock this supply bottleneck and restore market circulation."

Revitalizing Private Rental Market... Develop Private and Corporate Rental Providers

The second recommendation focuses on the recovery of the private rental housing market. Private rental housing in Seoul totals 407,000 homes—around 20% of all rental homes—with some 93,000 private landlords serving as key suppliers.

Mayor Oh urged that "Landlords should not be viewed as regulatory targets, but rather as primary suppliers of stable jeonse and monthly rental housing," and requested relaxation of loan restrictions and aggregate property tax exclusion limitations for buy-to-let landlords.

He also proposed the introduction of a "Corporate Private Landlord System" to foster consistent, long-term suppliers in the currently stagnant non-apartment rental market.

Prevent Surging Taxes and Ease the Burden for the Middle Class and Long-term Owners... Urgent Need for Tax Reform

The third recommendation is tax reform for homeowners, especially those holding a single home and long-term property owners burdened by rapidly rising tax bills resulting from official assessed value increases.

Mayor Oh stated that the fair market value ratio for the Comprehensive Real Estate Holding Tax should be frozen at current levels while retaining the long-term ownership special deduction, and that the tax base for property tax and comprehensive real estate holding tax should be adjusted to reflect rising general prices and housing prices over the past 16 years.

It is expected that in 2026, the burden of the comprehensive real estate holding tax for single-home owners in Seoul will climb by 79% and the number of taxpayers increase by 35% compared to the previous year, solely due to increases in official assessed value. If the fair market value ratio is raised to 80%, the tax burden could escalate by as much as 210% year-on-year, according to the analysis.

Expanded Housing Cost Support and Laying the Groundwork for 130,000 Public Homes

Mayor Oh not only called for central government policy changes but also introduced Seoul City's independent efforts to enhance residential stability for citizens.

Through the "Comprehensive Housing Stability Measures for Unhoused Citizens" announced this March, Seoul City is supporting jeonse deposits, loan interest, and monthly rent, helping to alleviate immediate housing cost burdens for the unhoused. Simultaneously, in the medium to long term, the city has laid the foundation to supply a total of 130,000 public housing units by expanding both public sale and public rental options.

Seoul City is also accelerating efforts to increase overall housing supply, including through private redevelopment projects. The city is currently implementing its "Nine Fast-Track Tasks for Housing Supply," aiming to start construction on 310,000 homes citywide by 2031.

Mayor Oh stressed, "Even as we wait for decisive government action, Seoul City will not stop its own efforts. We will move forward on all projects we can, ensuring that housing long anticipated by citizens is actually supplied." He added, "None of the initiatives proposed by Seoul City are for the city government alone. Each directly impacts residents' access to jeonse, monthly rentals, relocations, and achieving homeownership. Seoul City's housing data and experience will always be available for cooperation with the central government," he said.

This content was produced with the assistance of AI translation services.