No Homes, But People Keep Coming: Seoul's Supply Cliff Becomes Reality

*Editor's Note: 'AI PRISM' (Personalized Report & Insight Summarizing Media) is an 'AI-based customized news recommendation and summary service' developed with support from the Korea Press Foundation. It selects and provides six customized news items for each reader type.

1. Permits Plunge 35%...Seoul Apartment Completions Halved This Year

- Key Summary: As housing demand in Seoul and the greater metropolitan area outpaces supply, raising upward pressure on home prices, permits and completions are instead declining. According to the Ministry of Land, Infrastructure and Transport's 'May 2026 Housing Statistics,' Seoul apartment sales transactions in May totaled 8,946, up 18.9% from the previous month and 23.9% from a year earlier. In contrast, national housing permits fell 35.5% from the previous year to 379,834 units last year, and Seoul apartment completions plunged 53.3% from a year earlier to 1,413 units in May. As a result, the shift from jeonse to monthly rent has also accelerated, with the cumulative share of monthly rent transactions nationwide rising to 68.6% in May.

2. Will Both Comprehensive Real Estate Tax Rate and Fair Value Ratio Rise?...New Separate Tax Base for Ultra-High-Priced Single Homes Also Discussed

- Key Summary: The government is reportedly reviewing a plan to simultaneously raise the comprehensive real estate tax rate and the fair market value ratio in the tax reform proposal to be announced in late July. The current comprehensive real estate tax rate for housing is 0.5–2.7% for those with two or fewer homes and 0.5–5.0% for those with three or more, and the market speculates that this could be reverted to the levels under the Moon Jae-in administration. It is discussed that the fair market value ratio may be gradually raised by 5 percentage points each year from the current 60%, and a plan to create a separate tax base bracket for ultra-high-priced single homes with a published value of 3 to 4 billion won is also being reviewed. Park Hoon, a professor of taxation at the University of Seoul, said, "Adjusting the fair value ratio through enforcement decrees and adjusting the tax base bracket through legislation could be a realistic approach."

3. "Expected" No Confusion, But Balloon Effect Could Spread to Byeongjeom and Gwonseon

- Key Summary: On the 30th, the government made a surprise announcement designating Dongtan district in Hwaseong, Giheung district in Yongin, and Guri city in Gyeonggi Province as adjustment target areas, speculation-overheated districts, and land transaction permit zones—a "triple regulation." Dongtan, where the semiconductor boom combined with transportation benefits such as the GTX-A pushed this year's apartment price growth rate to 11.38%, the highest in the nation, saw the 84㎡ unit of 'Dongtan Station Lotte Castle' trade at 2.225 billion won, up more than 200 million won in a month. In the field, along with concerns over a transaction cliff due to the ban on gap investment, the possibility of a balloon effect in which demand shifts to nearby areas such as Byeongjeom, Gwonseon, Namyangju, and Gunpo was also raised. Ham Young-jin, head of Woori Bank's Real Estate Research Lab, forecast, "There is a high possibility that transaction volume will decline noticeably for the next six months to a year."

4. Samsung and SK to Build 90 Trillion Won Data Center in Honam Combined

- Key Summary: Samsung and SK have decided to build a 90 trillion won artificial intelligence (AI) data center in the southwestern region, on top of an 800 trillion won semiconductor fab. Samsung Electronics (005930.KS) will invest 17 trillion won in Solaseado, Haenam, South Jeolla Province, to build a 210 MW (megawatt) national AI data center, targeting operation in 2028, while SK plans to spend about 70 trillion won to build a 1 GW (gigawatt)-class data center. The two companies have decided to concentrate major AI industries in the southwestern region—from semiconductor production to data centers and renewable energy infrastructure—carrying out investments of 425 trillion won by Samsung and 470 trillion won by SK. Kwak No-jung, president of SK hynix (000660.KS), said, "It is time for Korea to build the next stage of global AI infrastructure, following semiconductors."

5. Gwangju Real Estate Moved Before the 'Fab Attraction' Announcement

- Key Summary: An analysis by The Seoul Economic Daily using RSquare Analytics found that the average size per land transaction in the Gwangju area from January to May this year was 351 million won, up 42% from the same period last year. Total transaction volume was 325, down 30% from the previous year, but the transaction value maintained a similar level at 114 billion won, and in April, the transaction value rose 34% from the same period last year. Transactions were active in the Cheomdan 3 district and areas near the military airport, with Gwangsan-gu, where the advanced industrial belt has formed, recording the largest transaction value at 35.3 billion won. Park Won-gap, senior real estate specialist at KB Kookmin Bank, noted, "Expectations for megaton-class industrial investment, such as AI semiconductor fabs, ultimately lead to changes in land prices and transaction patterns."

6. Lotte E&C Cuts PF Contingent Liabilities, But 2.4 Trillion Won Maturing Within a Year Remains a 'Spark'

- Key Summary: Lotte E&C is accelerating the reduction of its real estate project financing (PF) contingent liabilities, but the burden remains, with the PF loan balance maturing within a year reaching 2.4754 trillion won, or 83% of the total. As of the end of the first quarter this year, the scale of PF-related credit enhancement was 3.3909 trillion won, down 211.2 billion won from the end of the previous period, but bridge loan guarantees at the pre-main-PF conversion stage also remain at around 3 trillion won. First-quarter operating profit was 50.3 billion won, up more than 13-fold from the same period last year, but operating cash flow recorded a net outflow of 542.4 billion won, widening the gap between profit and actual cash flow. A Lotte E&C official said, "Liquidity conditions are much more stable than in the past," adding, "We will continue to reduce contingent liabilities further by year-end."