With the Jeonse Crisis Stirring Deposit Prices... "Difficult to Announce Jeonse Measures This Week Again"

Government Holds 'Green Room Meeting' Instead of 'Real Estate Market Inspection Ministers' Meeting'
Seoul Apartment Jeonse Price Increase Rate Rises to 0.12%
Sales Prices Also Rise from 0.01% to 0.02%

The Democratic Party of Korea and the government have settled on easing property tax for single-homeowners with a threshold of "under 600 million won." The major shareholder requirement for stock capital gains tax will be maintained at the current 1 billion won with a grace period. The photo shows the view of Seoul apartments from the observatory of 63 Building on the 3rd. Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporters Joo Sang-don (Sejong) and Jang Se-hee] The government has yet to present clear measures despite the worsening Jeonse crisis. It is highly likely that no additional Jeonse measures will be announced this week either. While the government struggles to devise countermeasures, Jeonse prices are sharply rising again, and sales prices have also increased accordingly.

On the 10th, a government official stated, "Discussions among related ministries on additional Jeonse measures are ongoing," adding, "It is unlikely that Jeonse measures will be announced this week."

Earlier, Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, said at the National Assembly, "If there were definite measures, the government would have announced them," and added, "There are not many sharp short-term measures." This expressed the difficulty in finding effective Jeonse measures.

At the National Assembly's Planning and Finance Committee the previous day, it was also stated, "We feel sorry that the upward trend in Jeonse prices has not yet been curbed due to multiple complex factors affecting the Jeonse market."

According to the Korea Real Estate Board, the Seoul apartment Jeonse price increase rate was 0.08% from the 1st to 3rd week of October, but expanded to 0.10% in the 4th week of October and 0.12% in the 1st week of November. Sales prices also saw a larger increase. Seoul apartment sales prices, which had a 0.01% increase rate from the 4th week of August to the 4th week of October, rose to 0.02% in November.

With both Jeonse and sales prices rising again, the government's concerns have deepened. Deputy Prime Minister Hong said, "The Jeonse market is like two sides of the same coin with the sales market," adding, "If Jeonse measures are implemented strongly, they can spill over into the sales market, so we must not implement Jeonse measures recklessly."

A subtle difference in perception among government ministries regarding the causes of the recent Jeonse crisis is also one of the factors making it difficult to establish additional Jeonse measures. At the National Assembly's Budget and Accounts Committee the previous day, Minister of Land, Infrastructure and Transport Kim Hyun-mi said, "There are various factors behind the recent Jeonse difficulties, but it is difficult to say it is because of the 'right to request contract renewal' or the 'Three Lease Laws (Jeonse and Monthly Rent Reporting System, Jeonse and Monthly Rent Cap System, Right to Request Contract Renewal),'" whereas Deputy Prime Minister Hong mentioned, "I expect that the Three Lease Laws probably had some influence." Deputy Prime Minister Hong thus partially acknowledged the connection between the current Jeonse market instability and the Three Lease Laws. This aligns with the diagnosis made at the '9th Real Estate Market Inspection Ministers' Meeting' held on the 28th of last month, stating, "The current Jeonse market is in a transitional phase where new systems such as the Three Lease Laws are being established, and various policy and other factors are complexly affecting the market."

Reflecting these concerns, the government decided not to hold the Real Estate Market Inspection Ministers' Meeting this week. Instead, it will hold a 'Ministers' Meeting (Green Room Meeting).' The Green Room Meeting is a forum where various issues are discussed. While Jeonse measures may be reviewed at this meeting, since the Green Room Meetings have mainly focused on coordinating opinions and consultations among ministries rather than establishing or announcing specific measures, the likelihood of the government announcing additional Jeonse measures immediately is low.

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