As extensions of maturities on apartment collateral loans in the Seoul metropolitan area and other regulated zones are, in principle, banned for owners of multiple homes, concerns are rising that instability in the jeonse and wolse markets could grow. Owners of multiple homes who can no longer extend their loans are expected to either put properties up for sale or renew lease contracts, which could lead to a reduction in new jeonse and wolse supply. There are also indications that landlords facing tougher borrowing conditions could raise jeonse and wolse deposits to secure funds, adding pressure to the lease market.
On the 1st, related ministries including the Financial Services Commission, the Ministry of Economy and Finance, the Ministry of Land, Infrastructure and Transport, and the Ministry of the Interior and Safety announced the "2026 household debt management plan." Under this measure, owners of multiple homes and registered rental business operators will no longer be able to extend maturities on apartment collateral loans in the Seoul metropolitan area and other regulated zones. The government will allow maturity extensions only until the end date of lease contracts based on the date the household debt management plan is announced.
However, the government excluded non-apartments such as officetels and villas from the loan recall targets for owners of multiple homes. The move is intended to prevent affordable dwellings from being hit by shocks in the lease market. The government also decided to allow loan extensions until the end date of renewed lease contracts to reduce confusion among tenants.
Still, the market expects turmoil in the jeonse and wolse markets to be inevitable despite the government's tenant protection measures. Since the end of the temporary easing of capital gains tax surcharges for owners of multiple homes on May 9, listings have increased in the real estate market, and a similar situation is expected in which instability grows in the lease market. According to Asil, a real estate big data company, jeonse and wolse listings in Seoul totaled 30,530 as of this day, down 31.3% from 44,424 on Jan. 1. In particular, with dwelling supply insufficient, the latest measure could trigger supply-demand instability for jeonse and wolse units.
Ham Young-jin, head of the Woori Bank Real Estate Research Lab, said, "This measure could reduce apartment jeonse listings and accelerate a shift to wolse, which, unlike its stabilizing effect on the sales market, could add some burden to the apartment lease market," and added, "While maturity extensions are allowed until the end of lease contracts when tenants are in place, and non-apartment owners of multiple homes are excluded from this loan recall measure, this only cushions the shock to the lease market and is expected to affect the reduction of jeonse listings over the long term."
Kim Hyo-sun, senior real estate expert at KB Kookmin Bank, said, "For now, occupancy deferrals have been granted, but if a landlord sells, the tenant cannot renew and must move out. Because this is a regulation focused on apartments, instability in the jeonse market is expected," and explained, "Newly built apartments are not being supplied at the usual pace, so volatility in jeonse and wolse listings could increase, making tenants feel uneasy."
On top of the jeonse supply-demand issue, the possibility that landlords could raise deposits to repay loans is expected to further heighten instability in the jeonse and wolse markets. Nam Hyeok-woo of the Woori Bank Real Estate Research Institute said, "There could be cases where liquidity is used for loan repayment by increasing jeonse deposits or disposing of other asset, and some owners of multiple homes may still try to maintain their existing dwellings, so we need to watch for a temporary increase in listings."
Lee Eun-hyung, a research fellow at the Korea Institute of Construction Policy, also noted, "Over the long term, the decrease in listings and some deepening of price volatility in the apartment rental market could occur," and pointed out, "Given that the jeonse-to-sale price ratio in Seoul does not exceed the 50%–60% range, a decline in listings in the rental market is not favorable from the standpoint of existing apartment tenants."
There are also projections that if regulations on jeonse loans intensify, the shift from jeonse to wolse will accelerate. Nam said, "If even jeonse loans become constrained by the loan limit, there is a risk that jeonse demand will be semi-forced into the wolse market, accelerating a 'wolse-ization,'" and emphasized, "This could increase housing cost burdens for low-income tenants, so we must be careful to ensure that demand-suppression measures do not undermine end users' residential stability."