Government Policy Direction Will Be Important This Year
Non-Metropolitan Areas Projected to Decline
Metropolitan Area Shows Mixed Projections
Experts: Rise vs. Real Estate Agencies: Fall
KB Financial Group (Chairman Yang Jong-hee) published the "2025 KB Real Estate Report" containing last year real estate market analysis and this year outlook on the 16th. In this report, KB Financial projected that the housing market that repeated ups and downs last year is likely to show overall downward stabilization this year. Particularly, differentiation by regional preference is expected to intensify, with government loan regulations and supply policies acting as key variables controlling market flow. Key projections: national average housing prices projected to decline 1-3%; Seoul and metropolitan high-demand areas may show flat to slight increase while regional cities project 3-7% declines; apartment market more resilient than single-family home market; the expert-agency divergence (experts more bullish, real estate agencies more bearish) reflects uncertainty about government policy continuity and loan regulation impacts. Government policy variables: the Loan-to-Value (LTV) and Debt Service Ratio (DSR) regulations that limited speculative buying remain in force; new housing supply (especially in Seoul and Gyeonggi) coming to market from 2023-2025 approvals; reconstruction and redevelopment project pace; government stance on relaxing regulations if market softening becomes severe. The structural factor: Korea demographics (declining birth rate, aging population, household size reduction) create long-term housing demand uncertainty that is suppressing investor confidence in sustained price appreciation.
