South Korea’s real estate market is grappling with uncertainty following the December 3 emergency martial law and the subsequent impeachment proceedings against President Yoon Suk-yeol. (Image courtesy of Yonhap)
SEOUL, Dec. 9 (Korea Bizwire) – South Korea’s real estate market is grappling with uncertainty following the December 3 emergency martial law and the subsequent impeachment proceedings against President Yoon Suk-yeol. Political instability, coupled with tightened loan regulations, has dampened buyer sentiment, raising fears of a prolonged downturn in the housing sector.
Apartment transactions in Seoul have seen a sharp decline, with October recording 3,725 contracts, down from 9,206 in July. Preliminary data for November indicates further contraction, with only 2,348 deals reported. Price fatigue in high-demand areas and restrictive lending policies have further eroded demand.
Notably, Gangdong District recorded a 0.02% price drop last week—the first decline in eight months—underscoring the market’s fragility. Experts warn that escalating political tensions could deepen economic uncertainty and extend the housing slump.
“The market is increasingly cautious as political instability spills into economic unease,” said Kwon Dae-jung, a real estate professor at Sogang University. “If partisan gridlock persists, the real estate sector could face significant challenges.”
Housing supply goals are also under pressure. The government aimed to greenlight 540,000 units this year but had approved only 244,777 units by October, falling short of its annual target. While public sector projects, including 14,000 units of affordable housing, remain a priority, the private sector’s diminished momentum and political unrest may undermine broader supply initiatives.
Flagship policies like the redevelopment of Seoul’s Greenbelt area and the reconstruction of first-generation new towns, including a planned groundbreaking in 2027, face potential delays. Additionally, critical real estate reform bills, including measures to ease redevelopment regulations, remain stalled in a politically paralyzed legislature.
“Delays in redevelopment projects and policy uncertainties could severely hinder urban housing supply,” said Kwon. “Achieving political stability and passing key legislative reforms are essential to addressing the market’s mounting challenges.”
The real estate sector’s future hinges on resolving political uncertainties and reinvigorating both public and private housing initiatives. Without decisive action, South Korea’s housing market risks a prolonged period of stagnation.
M. H. Lee (mhlee@koreabizwire.com)
