Jeong Dong-yeong: "36% of Apartments Purchased in Speculative Overheated Zones like Seoul Are for Rental Purposes"

▲ Monthly purchase rate of rental purpose housing by age group in speculative overheated districts in 2018, disclosed by the office of Jeong Dong-yeong, Democratic Peace Party (Provided by the office of Jeong Dong-yeong)

[Asia Economy Reporter Lee Chun-hee] Jeong Dong-young, leader of the Democratic Peace Party, announced that an analysis of the 'Apartment Move-in Plans in Speculative Overheated Districts' submitted by the Ministry of Land, Infrastructure and Transport revealed that 68% of buyers in their teens and 54% of buyers in their twenties purchased homes for rental purposes rather than for actual residence. Overall, 36% of the total move-in plans indicated purchases for rental purposes. Jeong analyzed this by stating, "It is presumed that speculative demand due to rising housing prices played a significant role."

Jeong disclosed on the 16th the results of analyzing 201,022 move-in plans submitted from 31 areas, including 25 autonomous districts in Seoul, Sejong, Gwacheon, Gwangmyeong, Hanam, and Bundang-gu in Seongnam, Gyeonggi Province, and Suseong-gu in Daegu. Since December 2018, when purchasing homes priced over 300 million KRW in speculative overheated districts, submission of funding and move-in plans has been mandatory.

By age group, those in their 30s and 40s were the largest buyers. The purchase share of those in their 40s was 30.8% (61,624 cases), and those in their 30s accounted for 28.4% (56,845 cases), making these two age groups the largest proportions.

Looking at purchase purposes, 72,279 cases, or 36% of the total, were for rental purposes. Notably, among those aged 10 and under, 82 out of 121 cases (68%) purchased homes for rental purposes, about twice the overall rate. Their own residence purpose accounted for only 6 cases (26%). Among those in their twenties, 2,943 out of 5,412 cases (54%) were for rental purposes. Jeong diagnosed, "It is presumed that these were purchased as gifts from parents."

The age group with the highest proportion of purchases for own residence was those in their 30s. Out of 56,845 cases, 60% (34,066 cases) indicated plans to purchase homes for their own residence. The rental proportion was at the average level of 35% (19,852 cases).

▲ Status of move-in plans by age group within speculative overheated districts in 2018, disclosed by Assemblyman Jeong Dong-yeong's office (Provided by Assemblyman Jeong Dong-yeong's office)

However, Jeong analyzed, "As housing prices continued to rise under the Moon Jae-in administration, the proportion of rental-purpose home purchases among those aged 30 and above, which was in the 30% range, has sharply increased." Analyzing last year's data by monthly cases, the rental proportion among those aged 30 and above, excluding those in their twenties and below (45%), was in the 22-24% range in January but jumped to 43-45% in December. Those aged 20 and below also rose to 67%. Jeong stated, "It is presumed that many are gap investments involving the succession of jeonse deposits," and added, "Having experienced the rise in surrounding housing prices, it is presumed they entered speculation aiming for capital gains."

Jeong said, "The president says he is firmly committed to curbing real estate speculation and stabilizing prices, but declarative statements that even he is not confident about only increase the public's housing anxiety," and added, "Strong measures capable of controlling housing prices must be implemented, including the full implementation of the three-part real estate reform package, suspension of the 3rd new town developments that induce speculation, and continuous supply of affordable public housing such as land lease buildings and sale housing."

This content was produced with the assistance of AI translation services.