Minister Kim Hyun-mi, "Cautious Approach Needed When Applying Rent Cap System to New Contracts"

[Asia Economy Reporter Yoo In-ho] Kim Hyun-mi, Minister of Land, Infrastructure and Transport, expressed caution regarding the plan to apply the rent ceiling system not only to lease contract renewals but also to new contracts, saying, "There are many factors to consider."

On the 6th, during the budget review by the National Assembly's Land, Infrastructure and Transport Committee, when Jin Sung-jun of the Democratic Party suggested pushing for the application of the rent ceiling system to new contracts as well, Minister Kim responded in this manner.

Minister Kim said, "When the three lease laws were introduced earlier, there was much discussion, but applying the rent ceiling system to new contracts was not reflected due to many considerations, and that remains unchanged."

The right to request contract renewal and the rent ceiling system allow tenants to live for an additional two years after residing for two years, while limiting rent increases to within 5% of the existing rent.

The amendment to the Housing Lease Protection Act currently pending in the National Assembly includes provisions that allow rent increases for new contracts only by a certain percentage of the previous contract's rent.

Minister Kim added, "Rather than reviewing something new now, we need to analyze various issues and seek response measures."

Regarding the rent and lease measures, he said, "The lease law was amended and the right to request contract renewal began to be exercised starting from contracts in September, so accurate understanding requires statistics gathered through confirmed dates. Since the new system has only been in effect for a few months, we will observe the situation further."

When asked about the position on People Power Party lawmaker Song Seok-jun's suggestion that Democratic Party leader Lee Nak-yeon propose creating a Ministry of Housing and Regional Development, Minister Kim said, "Many citizens are worried about the housing market, and we are managing the situation with a very apologetic heart. Many countries have organizations responsible for housing policies, such as housing agencies, and focusing solely on housing issues might make things run more smoothly, so I think that is why such a suggestion was made."

Regarding the recent announcement of the roadmap for the actualization rate of real estate official prices, Minister Kim emphasized, "Please understand that the actualization of official prices is not to raise taxes but to establish a framework for tax fairness. When I took office, the actualization rate for high-priced houses in Seoul was 20-30%, while rural houses worth 200 to 300 million won had rates around 60%. This is a process of normalizing that."

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