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Without touching the law of leasing … Strand as a supply-oriented measure
Complementary measures maintaining the existing political direction
A monthly rent deduction proposal can be included
View of apartments in downtown Seoul (Photo = Yonhap News)
As early as this week, the government will announce pre-generation measures to stabilize the cheonsei market. It is a promising direction to increase rental housing that can be used as a substitute for jeonse and reduce the tax burden for monthly tenants. It is expected to be a countermeasure to complement the existing policy direction without directly modifying the leasing law.
According to government-related ministries on the 25th, the government plans to announce measures to stabilize the jeonse market starting this week or next. In the early days of the jeonse crisis, the government maintained its position of monitoring the situation, saying: “We will strengthen monitoring.” So the current Cheonsei crisis is known to be hard to neglect, and it is known that it has recently taken a step towards taking countermeasures.
Domestic jeonse price rises for 12 months … Seoul jeonse price rises the most in 9 years
Although the market criticizes the ‘new leasing law’ for the cause of the jeonse crisis, the government blames it for the ‘low interest rate cut due to the coronavirus’. The government was wary of the additional countermeasures as much as the difference in stance on the cheonsei crisis. However, the jeonse crisis that has raged in Seoul since last July has spread to the metropolitan area and across the country, and as jeonse is converted to monthly rentals accelerates, the desire of ordinary people is growing. A lot is taken out of a jeonse lease, a global drug is canceled (when a tenant with a higher jeonse price appears), and a dispute occurs between tenants for a property. As the fall moving season overlaps, this jeonse crisis intensifies.
The total price has been increasing for 12 consecutive months nationwide. According to the Korea Appraisal Board, the rental price of apartments across the country in the third week of this month increased by 0.21% over the previous week, registering the largest increase in five years and six months since third week of April 2015 (0.23%). In data released by KB Real Estate Liveon, the rate of increase in apartment rental prices in Seoul was 0.51%, the highest in nine years.
Vice Premier Hong Nam-ki and Minister of Strategy and Finance and Minister of Lands, Infrastructure and Transport, Kim Hyun-mi, also attended the state administration last week and announced additional measures. However, he suggested that it would be to ease the burden through other supply policies or additional benefits, rather than modifying the leasing law that may directly affect the jeonse market. On the 22nd, Vice Premier Hong said, “I have reviewed all the pre-generation policies for the past 10 years” and “(now) there are not many drastic measures.” Minister Kim said on the 23rd: “I agree to a plan to ease the burden on tenants through tax credits, etc.” and said: “As this is a matter that requires consultation with the tax authority, we will discuss it.”
The government is promoting “expanding the offer for ordinary people” in real estate measures. In addition to the third new city, the expansion contents of the offer are dominant in the recent 8 · 4 measures. Given that it was a position to resolve the rise in supply house prices, the “supply countermeasures” are emerging this time as a strong force. The public rental housing supply program is expected to increase from one to two years or the pre-sale amount can be converted to rent.
It is expensive to improve the leasing law … The amount of public leasing is likely to expand sooner
Vice Premier Hong also said: “The best measure for the jeonse market is to provide enough public rental housing. The government has already prepared such a roadmap, so that at least one of the four can be chartered with a feeling of stability, the supply plan will continue smoothly. I will push it out. “
It is also possible to extend the monthly rent deduction. Minister Kim Hyun-mi has promised to ease the burden on tenants through tax credits, etc. However, the Ministry of Information and Communication is in the position that so far there has not been a debate about it.
Hong Nam-ki, Deputy Prime Minister for the Economy and Minister for Strategy and Finance, responds to the audit. (News Photo 1)
The current tax law contains the content of providing monthly tax credits within the 7.5 million won limit when homeless households with an annual gross salary of 70 million won or less live in a house with a standard market price of less than 300 million won. Here, methods such as broadening the subject of tax credits or increasing the limit can be applied.
However, the standard rent and the cheonsei ceiling, which were mentioned as additional measures in the market, are expected not to be included this time. The standard rent is a system that determines the appropriate level of rent for rental housing, such as the disclosure of real estate prices. It is a burden for the government, as it is possible to make adjustments just by touching the contract renewal application system. Vice Premier Hong also directly drew a line for such measures. He replied, “I have not reviewed it,” when asked if he had reviewed the introduction of the standard rental system and the rental limit for new contracts during the state audit.
On the other hand, there are opinions that the jeonse market will be relatively stable after the fall moving season. Kim Yong-beom, First Deputy Minister of the Ministry of Strategy and Finance, said: “The current cheonsei market is the result of a combination of several factors, such as policy factors such as the Leasing Law 3, seasonal factors such as the moving season. Fall and waiting for a new city to sign in. Starting in November when Lee has finished, there is a chance that the rental market to cheonsei will find some stability, along with the expansion factor of the new offering.
Amid the jeonse shortage and the skyrocketing jeonse prices, phrases are posted criticizing government policies on apartment complex real estate. Photo = Yonhap News
Hankyung.com reporter Kim Hana [email protected]
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