Impact of Stress DSR Phase 3: Why is the Seoul Apartment Jeonse Crisis Deepening This Fall?

As strong financial loan regulations, such as Stress DSR Phase 3, take effect, home-buying sentiment is rapidly cooling. With the fall moving season approaching, demand is shifting heavily from purchasing to Jeonse (long-term deposit lease), causing Jeonse prices in the Seoul metropolitan area to skyrocket at an alarming rate.

Higher Loan Thresholds and Dampened Buying Sentiment

The introduction of the Stress DSR Phase 3 to strictly manage household debt has significantly reduced bank loan limits. As the threshold for mortgage loans becomes much higher, a wait-and-see attitude is deepening in the real estate market, causing the national apartment move-in outlook index for August to drop to 94.4. Real demanders, struggling to secure funds due to loan restrictions, are postponing their purchases and turning to the Jeonse market, worsening the supply shortage.

Decreased Housing Supply and Soaring Jeonse Prices

The supply-demand imbalance in the Jeonse market is deteriorating further as the volume of new apartment move-ins decreases. Especially in core areas of Seoul, Jeonse listings are being depleted quickly, driving up asking prices steeply. Experts express concerns that once the fall moving demand begins in earnest, the housing cost burden on tenants will significantly intensify.

Frequently Asked Questions (FAQ)

• What is the impact of Stress DSR Phase 3 on the housing market?
  It applies a higher spread rate when calculating loan limits, effectively reducing the maximum loan amount available to borrowers. This limits purchasing power and consequently increases the demand for Jeonse and monthly rent.
• When will fall Jeonse prices stabilize?
  Given the continued strict loan regulations and the expected shortage of new housing supply in the metropolitan area through the first half of next year, the prevailing view is that Jeonse prices are unlikely to stabilize in the short term.