Is Korea’s Real Estate Heading for a Crisis? The 6.27 Loan Regulation, Political Criticism, and the Looming Jeonse-Wolse Shift

A New Wave of Real Estate Regulation: What’s Happening Now?

Did you know that Korea’s real estate market is once again at the center of heated political and social debate? On June 27, 2025, President Lee Jae-myung’s administration announced a sweeping set of loan regulations, capping home mortgage loans at 600 million KRW and tightening restrictions for multi-homeowners. The government’s stated goal: to cool down soaring home prices and curb speculative buying, especially in Seoul and the surrounding metropolitan area. However, these new rules have reignited old controversies, with critics drawing direct comparisons to the Moon Jae-in administration’s policies, which many believe contributed to previous market instability.

Political Firestorm: Déjà Vu or Necessary Reform?

Opposition lawmaker Joo Jin-woo didn’t hold back, calling the new measures a “déjà vu of the Moon government’s failed real estate policy.” He argues that focusing solely on demand suppression, rather than expanding supply, risks repeating past mistakes. Joo and other critics claim that the 6.27 regulation mainly benefits wealthy cash buyers, while ordinary people—especially young adults and first-time buyers—are being squeezed out of the market. On social media and in the National Assembly, the debate is fierce: is this a prudent move to stabilize prices or a misstep that will deepen inequality?

Inside the 6.27 Regulation: What Has Actually Changed?

Let’s break down the core of the 6.27 policy. The new rules limit mortgage loans to 600 million KRW in regulated areas, bar multi-homeowners from taking out additional mortgages, and restrict the use of jeonse loans for so-called ‘gap investments.’ The government also reduced the loan-to-value (LTV) ratio and imposed a six-month move-in requirement for buyers using certain loans. These steps aim to discourage speculative buying and ensure that loans go to real home seekers. But the side effects are already being felt.

Jeonse Crisis: Supply Drops, Prices Surge

One of the most talked-about consequences is the sharp decline in jeonse (long-term deposit lease) supply. According to real estate data, the number of available jeonse apartments in Seoul dropped to just under 25,000 in late June—a double-digit percentage decrease over just a few months. The shortage is most acute in popular districts like Gangdong, where listings have plummeted by over 60%. As supply dries up, jeonse prices are rising fast, and many landlords are opting to convert their properties to wolse (monthly rent) contracts instead.

Wolse on the Rise: Is the Rental Market Changing Forever?

Here’s something that might surprise you: as of April 2025, over 60% of new rental contracts in Korea are now wolse-based, not jeonse. This is a dramatic shift from just a few years ago, when jeonse dominated the market. The main reasons? Tightened loan rules, a drop in new apartment supply, and landlords’ preference for steady monthly income. For tenants, especially young people and newlyweds, this means higher housing costs and less financial stability. Community forums like DCInside and Naver Café are filled with anxious posts from renters worried about being priced out or forced into less favorable contracts.

Supply Crunch: Fewer New Apartments, More Competition

The situation is made worse by a significant drop in new apartment supply. In the second half of 2025, the number of new units coming online in the Seoul metropolitan area is expected to fall by nearly 40% compared to last year. This supply crunch is driving up both jeonse and wolse prices, making it even harder for ordinary people to find affordable homes. Real estate bloggers and analysts on Naver and Tistory warn that unless the government addresses the supply side, price pressures will persist—and possibly worsen.

Community Voices: What Are Koreans Saying?

Online communities and forums are buzzing with strong opinions. On Theqoo and Nate Pann, some users vent frustration at the government, saying the new rules only help the rich and hurt regular families. Others blame landlords for chasing higher profits. On DCInside, a popular comment reads: “How are young people supposed to get married or start a family if they can’t even rent a place?” Meanwhile, a few voices on Instiz and Naver defend the policy, arguing that unchecked speculation would have made things even worse. The overall mood? Skepticism and anxiety, with many feeling caught in the middle.

Cultural Context: Why Does Real Estate Matter So Much in Korea?

To really understand the intensity of this debate, you need to know a bit about Korea’s unique housing culture. Homeownership is seen as a key marker of social status and security. The jeonse system, which allowed renters to live without monthly payments, was a crucial stepping stone for generations of young Koreans. Now, as jeonse contracts disappear and monthly rents rise, many feel that the “Korean Dream” of homeownership is slipping away. This cultural backdrop makes every policy change deeply personal and politically charged.

Looking Ahead: What’s Next for Korea’s Housing Market?

President Lee has hinted that the 6.27 regulation is just the beginning, with more measures on the way to stabilize the market. But with supply shrinking and rental costs rising, the pressure is on for the government to find a balance between curbing speculation and supporting real demand. Many experts and community members alike are calling for a renewed focus on expanding housing supply, streamlining regulations, and providing targeted support for vulnerable groups. As the debate rages on, one thing is clear: the future of Korea’s real estate market will be shaped not just by policy, but by the hopes and struggles of millions of ordinary people.