Housing Can Still Feel Insecure Even When Home Prices Fall

The goal of real estate policy should be housing stability for the public. It is problematic to judge a policy’s success or failure solely by how much it lowers home prices. Even if home prices fall, it is hard to say tenants’ housing conditions have improved if jeonse listings are difficult to find and the burden of monthly rent rises.

The sales market and the rental market are interconnected. Households that postpone buying a home because of lending regulations remain in the jeonse and monthly rental market for the time being. In areas where the supply of rental housing cannot keep up with demand, this kind of change can increase the burden of jeonse and monthly rent. That is why, when introducing measures to curb homebuying demand, the government must also examine their impact on the rental market. It should not uniformly restrict loans needed to buy a home or move simply for the sake of lowering house prices.

The same applies to regulations on multi-homeowners. Some of the homes they own are supplied to the jeonse and monthly rental market. When restricting their acquisition and ownership of housing, policymakers must consider how rental supply will change. If a tenant buys a home sold by a multi-homeowner and moves in, both rental supply and rental demand decrease together. But if it is bought by someone who already owns a home, only rental supply decreases. What matters is not how much the number of multi-homeowners has fallen, but how that change has affected the choices available to tenants who remain in the rental market.

Home prices reflect interest rates, income, location, and expectations for future supply. If the government focuses too heavily on restricting transactions and ownership to lower prices, it can easily overlook why demand is concentrated in certain areas and why supply is slow to increase. Even if there are many vacant homes in other regions, the housing problem in a given area remains if there are not enough homes available near jobs and schools.

Policy outcomes should also be evaluated through the housing costs borne by tenants. It is necessary to examine how much they pay in total when monthly rent, interest on deposit loans, and maintenance fees are combined, and whether they can still find a home to live in at a similar cost after their contract ends. If changes to tax policy or lending regulations increase the burden of housing costs, the cause should be identified and the side effects corrected.

What the government should devote its efforts to is improving the public’s housing conditions. It should reduce unnecessary constraints that hinder supply and the maintenance and redevelopment of aging housing in areas with high housing demand, and check whether housing supply plans have actually led to completed units ready for occupancy. Reducing flood risks in semi-basement housing and improving the safety and sanitation of aging homes are also tasks the government must address.

Home prices are an important indicator of conditions in the housing market. They should not be treated as a number the government can set at will. If measures intended to suppress prices end up blocking supply and reducing tenants’ choices, they should be reconsidered. What the public needs is not an announcement that house prices have been brought under control, but a home where they can live with peace of mind at a cost they can afford.

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Original title: 집값이 내려도 주거는 불안할 수 있다

Author: Sang-yeop Kim

Date: 2026-11-09

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=press&pn=1&idx=29724