[Op-Ed] To Stabilize Home Prices, Supply Comes Before Regulation

The real estate market is falling into confusion amid the government’s successive regulations. Restrictions on homeowners with multiple properties, introduced in the name of curbing home prices, have only intensified the concentration on “one smart home” in Seoul’s prime areas. By once again tightening restrictions even on owners of a single high-priced home, the government is creating a distorted vicious cycle in which one regulation gives rise to another.

The market is already showing signs of shrinking transactions. According to Asil, a real estate big data platform, the number of apartment listings in Seoul stood at 109,374 as of the 18th, up 10.1% from a month earlier. By contrast, the number of apartment sales transactions in Seoul in August, tallied by the Seoul Metropolitan Government through the 15th, came to 3,143, down 46.2% from the previous month based on reported transactions at that time. In other words, listings have increased, but they are not leading to actual transactions, producing what is known as a “transaction freeze.”

Excessive tax burdens and frequent regulatory changes discourage housing transactions. When capital gains tax and acquisition tax burdens are compounded by lending regulations and tax uncertainty, both homeowners and buyers tend to delay the timing of transactions. When taxes and regulations make the market rigid, it becomes difficult for the price adjustment mechanism to function properly, hindering both smooth housing transactions and efficient resource allocation.

There are clear limits to stabilizing the real estate market through taxes and regulations alone. Rather than suppressing market principles, policymakers must recalibrate their approach so that supply and demand can align naturally. Instead of repeatedly resorting to hasty suppression measures, it is time to shift policy direction so that the market’s inherent supply-and-demand function can operate.

First, real estate-related taxes should be reformed to get housing transactions moving again. The burden of not only capital gains tax but also acquisition tax and the local education tax added to it must be lowered so that both sellers and buyers can enter the market. Simply reducing the tax burden and opening an exit route for listed properties can help ensure that existing homes are supplied to end users.

Regulations on redevelopment and reconstruction that obstruct urban housing supply must also be improved. The reconstruction excess profit recapture system, complicated redevelopment procedures, and prolonged licensing and permitting processes are holding back private-sector supply. Policymakers should go beyond simply increasing the number of housing units and create an environment in which private capital can smoothly supply housing in the areas where people actually want to live.

The government’s role is not to directly control prices, but to establish the institutional foundation for smooth housing supply and transactions. It should reduce uniform lending suppression measures and remove regulations in land use, redevelopment projects, and licensing and permitting processes that stand in the way of supply. When housing prices adjust according to supply and demand, and those price signals lead to expanded supply and dispersed demand, even limited housing resources can be allocated efficiently.

A stable housing market requires smooth transactions and a continued expansion of supply. Rather than blocking the exit route for listings with punitive regulations, the government should facilitate transactions and increase supply so that people can freely choose the homes they want. Only when the government unlocks transaction taxes and gives private supply room to breathe will stability finally return to the real estate market.

Jaeyun Kim, Intern Researcher, Center for Free Enterprise (CFE)

---

Original title: [칼럼] 집값 안정, 규제보다 공급이 먼저다

Author: Jae-yoon Kim

Date: 2026-09-22

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=free_opinion&pn=1&idx=29556