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SEOUL: South Korea’s finance minister, the architect of rules meant to protect tenants and slow deposit increases, has been forced to search for a new home as owners react to the rules by quickly replacing to tenants so they can increase deposits.
Hong Nam-ki is also facing broadening her search, as the average warehouse where she lives 20 minutes from parliament has soared by a third since her housing rules went into effect in July, with the irony of her predicament turning the internet on. .
“Worst comes to worst, you can camp next to the Presidential Blue House, right?” asked a netizen on a real estate forum.
Apartment prices in Seoul have risen more than 50 percent since left-leaning President Moon Jae-in inherited relaxed mortgage rules from the previous administration three years ago.
To slow down the demand for buy-to-rent, the Hong Kong-led Home Leasing Protection Act capped “jeonse” deposit increases to 5% and allowed tenants to extend standard two-year contracts for another two, unless the owners themselves moved into the property.
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Jeonse is a lump sum refundable deposit that is paid in lieu of the monthly rent. The owners invest the deposit and pocket earnings.
The law sparked an unprecedented shortage of jeonse homes across the country as homeowners sought to vacate properties ahead of the July implementation so they could increase deposits for new tenants, hoping they could not collect them again for four years.
In Hong’s case, his lease ends in January, at which point the owner will move into the property, a real estate agent citing an industry database told Reuters, echoing reports from Hong Kong. local media.
“Fellow owners, we don’t rent from Hong, let him suffer!” wrote another netizen in the popular real estate forum. “Let’s make him feel what the government has done!”
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Reuters could not immediately reach Hong’s owner for comment. A Hong spokesperson declined to comment.
For a comparable three-bedroom apartment in Hong’s complex in upscale Mapo in western Seoul, the finance minister would now face deposits that increased 32 percent in three months to 830 million won (US $ 731,310), showed data from Naver Real Estate. .
Hong, who has worked in the government for more than 30 years, had a net worth of 1.06 billion won at the end of December, government data showed.
SCHADENFREUDE
Hong is one of the groups of senior officials popularly blamed for failing to curb runaway home prices in Asia’s fourth-largest economy, even after more than 20 rounds of mortgage restrictions and other measures during the tenure of Hong Kong. Moon. In that time, median apartment prices in Seoul have risen more than 50 percent, data from KB Bank showed.
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His forced move opened up a geyser of schadenfreude, with South Koreans struggling to find affordable housing mocking Hong for being a victim of his own making.
“Dear Hong, come live in my house. I’ll give you a good deal,” said a netizen.
“Hong is so smart. Way to go, bro. Keep playing the victim and demand a bigger job from Moon,” said another.
Hong, who is also deputy prime minister for financial affairs, owns but cannot move into either of his two properties. The tenant of his apartment in Uiwang, south of Seoul, has extended the lease for two years due to the new rules. The other property, in Sejong, is under construction.
In a regular parliament audit session in early October, Hong was asked by an opposition lawmaker if he had found a new home.
“I haven’t found one yet,” Hong said.
