The three-year grace period for live-in requirements attached to homes sold under South Korea's price cap on new homes begins to expire next year at major complexes across the greater Seoul area. When the law was revised in 2024, the requirement applied to 49,766 units across 77 complexes in the region, raising concerns that a wave of owners moving into their own homes could worsen supply strains in a rental market already short of listings.
Short-term jeonse listings carrying conditions such as "occupancy until November 2027" and "one-year term" have recently appeared at Olympic Park Forreon in Seoul's Gangdong District, which began move-ins in November 2024, according to real estate industry sources on the 25th. Of the complex's 12,032 total units, 4,786 sold in the general offering carry a two-year live-in requirement. Because owners must begin living in the units by November next year, when the three-year grace period ends, the complex is seen as the biggest test of what the expirations will bring.
Short-term rental listings at Olympic Park Forreon are being offered at relatively low prices. A 39-square-meter unit available for a long-term lease is currently asking 750 million won, while a larger 49-square-meter unit with about one year of occupancy is listed for as little as 700 million won. The restriction on how long tenants can stay has produced a price inversion, with the larger unit commanding a lower jeonse price.
The grace period stems from a revision to the Housing Act in March 2024. Homes subject to the price cap must be occupied by their owners for a set period, but the revision allowed owners to delay the start of occupancy by up to three years from the first date units become available. That opened a path for buyers short of funds for final payments to first rent out the units and cover costs with the deposits. Concerns were raised at the time that a concentration of owner move-ins three years later could jolt the rental market.
Beyond Olympic Park Forreon, grace periods expire next year at newly built complexes in Seoul and Hanam. The 593-unit e-Pyeonhansesang Godeok Urban Bridge in Gangdong District, which began move-ins in February 2024, reaches its deadline around February next year, while the 930-unit The Sharp Hanam Edifice in Hanam, Gyeonggi Province, which began move-ins that March, reaches its deadline around March. The 1,299-unit Gangdong Heritage Xi in Gangdong District began move-ins in October 2024 and faces its deadline around October next year. If owners who had rented out their units switch to living in them, existing rental supply could be pulled from the market, particularly in Gangdong and Hanam.
The problem is that supply conditions in Seoul's rental market are already tight. A drop in new apartment move-ins, combined with restrictions on the sales market, has left jeonse listings scarce and prices under upward pressure. Recent tax changes have also increased the burden on owners of expensive homes who do not live in them, and benefits have been restructured around actual years of residence rather than length of ownership, which is expected to strengthen incentives for owners to move in. "If the grace period deadlines pile on top of that, homes that had been supplied as jeonse could be reclaimed for owners' own use at a faster pace," an industry official said. "In particular, if jeonse listings drop sharply at Olympic Park Forreon, where 4,786 units alone are subject to the live-in requirement, it could stir supply concerns across Seoul's rental market, not just the Gangdong area."
