Hong Nam-ki "Expanding Housing Stability with Lease 3 Acts... Easing Income Criteria for Special Supply" (Comprehensive)

Chairing the 8th Real Estate Market Inspection Meeting of Relevant Ministers
"Recent Expansion of Housing Stability and Decrease in Gap Investments" Emphasizing the Effectiveness of Government Measures

Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, is delivering opening remarks at the '8th Real Estate Market Inspection Meeting of Related Ministers' held on the 14th at the Government Seoul Office in Jongno-gu, Seoul. Photo by Kang Jin-hyung aymsdream@

[Sejong=Asia Economy Reporter Kim Hyunjung] Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, praised the government's real estate measures, stating that housing stability in the jeonse market has expanded since the implementation of the three lease laws, which focus on strengthening tenant rights. Along with this, he announced plans to strengthen crackdowns on illegal market disruption activities and to relax income criteria for special supply for newlyweds and first-time homebuyers as part of supply expansion.

On the morning of the 14th, Deputy Prime Minister Hong presided over the 8th Real Estate Market Inspection Meeting of related ministers at the Government Seoul Office in Gwanghwamun, Seoul, and made these remarks. At the meeting, a plan was announced to further relax the income criteria for special supply for newlyweds and first-time homebuyers compared to the July 10 and August 4 measures, to provide opportunities for actual demanders to own homes.

Deputy Prime Minister Hong said, "We will promote additional relaxation of income criteria for special supply for newlyweds and first-time homebuyers so that more actual demand groups can have opportunities to own homes," adding, "For both public and private housing, 70% of the special supply for newlyweds will maintain the current standard of 100% of the average monthly urban worker income (120% for dual-income households), but the remaining 30% will have income criteria relaxed by about 20 to 30 percentage points." He continued, "Through this, about 92% of newlywed households without homes will qualify for special supply applications," and added, "Compared to the existing eligible newlywed households, this is expected to newly provide special supply opportunities to 81,000 households in public sales and 63,000 households in private sales."

Regarding the first-time homebuyer special supply, he stated, "70% of the special supply quantity will maintain the current standards (100% for public, 130% for private), but for the remaining 30%, the income criteria will be relaxed by about 30 percentage points." Detailed information will be separately announced by the Ministry of Land, Infrastructure and Transport, the competent authority.

Deputy Prime Minister Hong emphasized that the implementation of the three lease laws is showing effects in stabilizing housing for existing tenants. He explained, "Analysis of public guarantees for jeonse loans, mainly used by low-income people, shows that the housing stability effect for existing tenants has begun to appear," adding, "The renewal rate of public guarantees (under 500 million KRW) in September, when the right to request renewal started, recorded the highest figure of the year, indicating an increase in renewal contracts." In fact, the renewal rate of public guarantees in Seoul rose from an average of 55.0% from January to August to 60.4% in September.

Through funding plans, he observed that speculative demand has decreased recently while actual demand transactions have increased. He said, "The proportion of gap investments in Seoul and speculative overheated districts, which had risen to about 50% of total transactions in May and June, has decreased since July and sharply dropped to the 20% range in September," emphasizing, "The proportion of transactions with actual residence plans by the buyer or their family has increased, indicating that gap investments not intended for actual residence are being further restricted."

However, he expressed concern about the continued rise in jeonse prices. He said, "Unlike the stable sales market, the upward trend in jeonse prices continues," adding, "We take seriously the difficulties faced by those newly seeking jeonse and will closely examine and discuss the factors driving jeonse price increases with related ministries."

Regarding the public reconstruction pre-consultation that concluded on the 30th of last month, he announced that various complexes with different conditions, including those in the Gangnam area, non-Gangnam areas, large-scale, and small-scale complexes, applied in the first round. Deputy Prime Minister Hong said, "As understanding of the system gradually increases, interest is forming in the market," and added, "Since residents' opinions are the most important in promoting public reconstruction, we will provide consulting reports that thoroughly review estimated burden, business feasibility analysis, and construction plans as soon as possible."

Along with this, Deputy Prime Minister Hong made it clear that not only illegal sellers and brokers but also buyers will be severely punished for illegal resale of apartment pre-sale rights and other real estate market disruption activities. He said, "Regarding illegal resale of apartment pre-sale rights, under current law, illegal sellers and brokers are subject to criminal punishment, but there are brokers who induce transactions with false information that buyers of illegal resale will not suffer losses even if caught; this is completely untrue," emphasizing, "When illegal resale is detected, the project entity cancels the supply contract, causing the illegal resale buyer to lose buyer status and suffer strong economic disadvantages such as losing premiums paid to brokers and current market price gains."

He continued, "We fully understand that improving the housing market structure centered on actual demanders is by no means an easy task," and stressed, "However, I would like to emphasize once again that the government's determination to restore public trust in real estate policy is very firm this time."

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