The reality of a shortage in dwellings supply emerged as the biggest factor set to drive next year's home price increases. Most experts said the shortage of dwellings supply due to a cumulative lack of housing starts will push up home sale prices and also lead rents and monthly rents higher. The largest share of experts expected the shortage of apartment supply to reach 50,000 to 100,000 units nationwide. The share of experts observing a supply cliff with a shortage of at least 150,000 units also reached 15%.
Experts also said additional real estate measures to be announced by the government and the possibility of tax reform after the June local elections next year could become factors that spur home prices.
On the 2nd, when ChosunBiz asked 20 real estate experts for an outlook on the "2026 real estate market," 75% picked supply shortages as the factor that will have the biggest impact on next year's home prices. They expected declines in approvals and housing starts two to three years ago to significantly affect overall dwellings transactions next year, including sales and leases.
Following these supply shortages, 60% (multiple responses) said real estate policies such as tighter lending rules and higher real estate-related taxes will affect home prices. Interest rates (35%), the June local elections (10%), real estate project financing (PF) distress (5%), and higher presale prices (5%) were also expected to act in combination on home prices.
◇ Next year's completions to plunge
About half of the experts said that as apartment housing starts have fallen in recent years, the nationwide shortage of dwellings supply this year will reach 50,000 to 100,000 units. Next was 25% who said the shortage will be 100,000 to 150,000 units. The share who said more than 150,000 dwellings are needed also reached 15%. The response that 10,000 to 50,000 units of supply are expected was 15%.
The dwellings supply environment also appears likely to remain difficult this year. According to the Korea Housing Institute, presale volume in 2026 is 240,000 units. That falls far short of the average presale volume from 2017 to 2022 (305,000 units).
The supply shortage in the greater Seoul area is even more serious. This year's completions in the greater Seoul area are expected to be 120,000 units, less than half of the 250,000 units needed annually.
Woo Byung-tak, a senior adviser at Shinhan Bank Premier Pass Finder, said, "Regardless of price fluctuations, authorities need to show a long-term commitment to promoting supply in the greater Seoul area and to communicate about supply trends."
◇ Ongoing rise in lease and monthly rent also due to supply shortage
The lease and monthly rent market is also expected to continue rising as the effects of supply shortages spread. Kim Je-gyeong, head of Toomy Real Estate Consulting, said, "From 2026, as supply shortages fully set in, not only home prices but lease and monthly rent prices will surge together, creating a double whammy."
Experts noted that a drop in new dwellings supply is reducing the number of lease listings, while more people exercising their lease renewal rights is structurally constraining lease supply itself, pushing up lease prices. A decrease in private rental listings due to the continued policy stance of regulating multiple-home owners is another factor affecting lease prices.
In addition, after the Oct. 15 real estate measures, with Seoul and Gyeonggi designated as land transaction permit zones, buying and selling of dwellings such as apartments has become harder, and instead of lease demand moving into the sales market, it is staying in the lease market, which experts said is a factor driving lease prices higher. On top of that, due to lease fraud, lease demand has become concentrated only in apartments, leaving the lease market with excess demand and no supply, pushing prices higher.
Kwon Dae-jung, a distinguished professor in the Graduate School of Economics and Real Estate at Hansung University, said, "Lease demand needs to shift to purchase demand for lease supply to come to market, but both sales and lease financing are blocked by regulations, and not only is the supply of rental dwellings limited, supply in non-apartment segments has also been drastically reduced."
Ko Jun-seok, a professor at the Sangnam Institute of Management at Yonsei University, said, "Lease demand continues to increase due to marriage and other reasons, but prices are expected to rise due to supply shortages," adding, "Moreover, as land transaction zones expand, gap investment (purchases with a lease in place) is being blocked, which will likely further shrink supply."
As the "monthly-ization of jeonse" accelerates, monthly rents are also expected to rise. With stricter guarantee rules at institutions that handle lease guarantees, such as the Korea Housing & Urban Guarantee Corporation (HUG) and the Korea Housing Finance Corporation (HF), and with lease loans becoming harder to obtain, more contracts are expected to convert to monthly rent.
Kim Hyo-seon, chief real estate expert at the NH NongHyup Bank All100 Advisory Center, said, "Lease prices have surged in a short period, and due to the impact of real estate policies such as loan regulations and the land transaction permit system, monthly rents are expected to rise by 1% to 5%."
Kim Eun-seon, head of the data lab at ZIGBANG CO., said, "Monthly rents appear to be on an upward trend as lease supply constraints coincide with changes in the rental structure," adding, "With lease listings not coming to market smoothly due to regulations and supply conditions, some demand is moving to monthly rent, expanding monthly rent demand."
※ 20 experts surveyed (in Korean alphabetical order)
Ko Jun-seok, chief professor at the Yonsei University Sangnam Institute of Management; Kwon Dae-jung, professor at the Graduate School of Real Estate at Sogang University; Kim Gyu-jeong, head of the Asset Succession Research Center at Korea Investment & Securities Co.; Kim Seong-hwan, research fellow at the Korea Research Institute for Construction Policy; Kim Eun-seon, lead of the data lab at ZIGBANG CO.; Kim Je-gyeong, head of Toomy Real Estate; Kim Jin-yu, professor in the Department of Urban Transportation Engineering at Kyonggi University; Kim Hyo-seon, chief real estate specialist at NH NongHyup; Park Won-gap, senior specialist at KB Kookmin Bank; Seo Jin-hyeong, professor at Kwangwoon University; Song Seung-hyeon, CEO of Urban and Economy; Song In-ho, head of the KDI Economic Information Center; Sim Hyeong-seok, head of the Udabang Research Institute; Woo Byung-tak, Commissioner at Shinhan Bank Premier Pathfinder; Yu Seon-jong, professor at Konkuk University; Yun Ji-hae, senior researcher at Real Estate R114; Lee Eun-hyeong, research fellow at the Construction Economy Research Institute of Korea; Lee Chang-mu, professor in the Department of Urban Engineering at Hanyang University; Cho Young-gwang, researcher at Daewoo E&C; Ham Young-jin, head of Woori Bank Real Estate Research Lab