Credit: Public domain
On February 29, the National Assembly 국회 passed the revision to the Housing Act 주택법 that postponed the applicability of a “live-in requirement 실거주 의무” by three years. The requirement, introduced in 2021, mandated that home buyers of a newly constructed condominium in areas of high real estate price (which includes the entire Seoul metropolitan region) physically live in the condo for between two to five years.
The goal of the requirement was to discourage speculative “gap investment 갭투자”, in which a home buyer could purchase a house, immediately leverage it by putting it out on a jeonse 전세 rent, then buy another house with the proceeds. (See previous coverage, “The Jeonse Time Bomb.”) With the revision, the home buyer no longer has to live in the house she purchased as soon as it becomes available; she only needs to live in the house within three years.
The postponement came as an immediate relief for investors in large-scale condominium projects built during the height of the COVID-era liquidity bubble, such as the massive Olympic Park Foreon project in Seoul’s Dunchon-dong neighborhood. (See previous coverage, “Trouble in Dunchon-dong.”)
