President Lee Jae Myung speaks at a meeting at the Blue House on May 7. [YONHAP]
President Lee Jae Myung on Monday pushed back against criticism that the government is effectively reopening the door to debt-fueled real estate speculation by exempting some homebuyers from having to occupy the residences that they purchase.
“It would be a stretch to describe this as giving de facto permission for gap investment,” Lee wrote on X, referring to the practice of buyers purchasing homes with minimal upfront capital by leveraging tenants’ large lump-sum lease deposits under Korea’s
jeonse
rental system.
The practice, which typically relies on expectations of rising home prices, has long been criticized for fueling investor-driven housing demand and pushing prices higher in Seoul and surrounding areas.
Lee argued that the proposal is intended to ensure fairness by giving owners of a home occupied by nonowners the same opportunity to sell as owners of multiple homes.
Under current rules, the government waives owner-occupancy requirements only when a homebuyer without property purchases a home owned by a multiple-home owner in a regulated housing market.
The measure was introduced to encourage additional listings from multiple-home owners, but has prompted complaints from single-home owners who do not reside in the property and are unable to sell due to existing lease contracts.
The government is now considering extending the exemption to buyers of single-home properties with tenants in designated land transaction permit zones. The measure would allow transactions to proceed even when immediate occupancy is not possible because a tenant remains under a contract.
Lee stressed that the measure would still include safeguards to prevent speculative purchases.
“The exemption would be limited to homebuyers without property,” Lee wrote. “We are considering allowing occupancy after the current tenant’s lease ends, but limiting that period to no more than two years.”
He added that the proposal is intended to provide single-home owners the opportunity to put their homes on the market while still requiring purchasers to move in within two years.
Lee also reiterated his broader criticism of debt-fueled property investing, which he has argued diverts wealth into the housing market rather than more productive sectors of the economy.
“Escaping the ‘real estate republic’ is essential for Korea’s normalization and sustainable development,” he wrote. “If speculative home buying returns, how many people would truly benefit?”
This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
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