Real Estate Policy — Korea's Surge vs Japan's "Lost 30 Years"

Koreans' biggest concern is home prices. Japanese perception of real estate is "houses are consumables." Why so different?

Korea: War Against Soaring Prices

Seoul apartment average: ~₩1.2B (2024). About 20-25x average salary — over 20 years of saving with zero spending.

• Apartment Republic: ~62% of Korean housing is apartments

• Jeonse system: Korea-only rental where you deposit 50-80% of home value with zero monthly rent

• Gap investment: Using jeonse deposits to buy homes with minimal capital → speculation fuel

Policy (regulation-heavy): Multi-home tax up to 75% capital gains (world's highest), LTV/DTI limits, price caps, Rental 3 Laws (2020). Despite all regulation, Seoul prices kept rising — critics argue regulation reduced supply.

Japan: Bubble Burst and Empty House Nation

Tokyo 23-ward avg apartment: ~¥70M (~₩630M). But outside Tokyo is completely different.

• Empty houses (空き家): ~9 million nationwide (13.8% of all housing). Rural areas have free houses with no takers

• Population decline: Peak 128M (2008) → projected under 100M by 2050

• Land myth collapse: Post-1990 bubble burst destroyed "real estate always rises" belief

Policy (relaxation-focused): Mortgage tax deduction 10-13yrs, empty house penalties, rural migration subsidies up to ¥3M, long-term zero/negative interest rates.

Will Korea Follow Japan's Path?

"Yes" camp: Korea's fertility rate 0.72 (world's lowest), rural decline accelerating, Seoul concentration like Tokyo

"No" camp: Korean apartments are durable RC (vs Japanese wooden houses that depreciate to zero in 20-30yrs), jeonse creates different capital structure, Seoul supply constraints are worse, Korean "own home" desire is stronger