Seoul's All 25 Districts Designated as Speculative Zones to Stabilize Housing Prices
The South Korean government has designated all 25 districts in Seoul as speculative zones and introduced stricter lending rules to curb soaring housing prices. The measures, which also include potential tax revisions, aim to stabilize the volatile real estate market.
Housing MarketSpeculative ZonesSeoulReal EstateMortgage LoansReal Estate NewsOct 15, 2025
The new speculative zone designations add to the existing four districts of Gangnam, Seocho, Songpa, and Yongsan, effectively placing all 25 districts in Seoul under the speculative zone status. Additionally, twelve cities in Gyeonggi Province, including Gwacheon, Yongin, Uiwang, and Hanam, were newly designated as regulatory zones. The new designations will take effect on Thursday, marking the third set of housing market stabilization measures announced under the new administration since June.
Apartment prices in Seoul have been on a steep increase in recent months, particularly in neighborhoods around the Han River. This rise has fueled speculative demand and accelerated upward price trends, presenting a key policy challenge for the new government under President Lee Jae Myung. “The golden time for stabilizing the housing market must not be missed,” the land minister emphasized. “The government will mobilize all resources to place housing market stabilization at the top of our policy priorities.”
To address the issue, financial regulations on mortgage loans will be tightened. The government will apply a mortgage loan ceiling of 600 million won (US$420,688) for homes priced 1.5 billion won or less, 400 million won for homes valued at between 1.5 billion won and 2.5 billion won, and 200 million won for homes worth more than 2.5 billion won. Furthermore, the government hinted at the possibility of raising real estate-related taxes to “steer capital toward productive sectors.”
Specific revisions to housing tax rules will be determined after reviewing their impact on the market and tax equity. This proposal comes despite President Lee's campaign promise to avoid relying on tax hikes as a primary tool for housing market stabilization. During a parliamentary government audit, Finance Minister Koo clarified that the president’s past comments should be understood as an intent to use taxation only as a “last resort,” rather than ruling it out completely.
Authorities will also strengthen the crackdown on illegal housing transactions. The government will establish a real estate crime oversight body under the prime minister’s office, which will conduct investigations through an affiliated investigative unit. The land ministry plans to launch targeted investigations into false transaction price reporting, while the National Tax Service will closely monitor transactions involving luxury homes worth over 3 billion won. The National Police Agency will launch a special crackdown on real estate crimes, focusing on price manipulation, illegal subscriptions, and corruption tied to reconstruction and redevelopment projects.
Market watchers predict that the new measures will likely lead to a decline in transactions and a slowdown in the housing markets in Seoul’s outer districts and nearby areas in Gyeonggi Province in the near term. “For now, the announced measures are expected to block the spread of housing price hikes, not only across Seoul but also in the southern capital region, leading to downward pressure on prices in those areas,” said Park Won-gap, a senior real estate analyst at KB Kookmin Bank.
Frequently Asked Questions
What are speculative zones in the context of the South Korean housing market?
Speculative zones are designated areas where the government imposes stricter regulations to curb speculative demand and stabilize housing prices. These measures include tighter lending rules and higher taxes on property transactions.
How many districts in Seoul are now designated as speculative zones?
All 25 districts in Seoul are now designated as speculative zones, including the previously designated districts of Gangnam, Seocho, Songpa, and Yongsan.
What are the new mortgage loan ceilings introduced by the government?
The new mortgage loan ceilings are set at 600 million won for homes priced 1.5 billion won or less, 400 million won for homes valued at between 1.5 billion won and 2.5 billion won, and 200 million won for homes worth more than 2.5 billion won.
Why is the government considering raising real estate-related taxes?
The government is considering raising real estate-related taxes to steer capital toward more productive sectors and to curb speculative demand in the housing market.
What measures are being taken to crack down on illegal housing transactions?
The government is setting up a real estate crime oversight body under the prime minister’s office and launching targeted investigations into false transaction price reporting. The National Police Agency will also focus on price manipulation, illegal subscriptions, and corruption tied to reconstruction and redevelopment projects.
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