[Exclusive] Jeonse Measures to Supply 100,000+ Units by Purchasing Under-Construction Homes... Also Remodeling Factories

Government to Announce 'Housing Stability Measures for Low and Middle-Income Groups' on the 18th
100,000+ Units Planned for Seoul and Metropolitan Area... Factories to Be Remodeled into Housing

[Image source=Yonhap News]

[Asia Economy Reporter Jang Sehee] The government is set to announce a comprehensive jeonse (long-term lease) plan this week, with the total supply volume confirmed to reach 100,000 units + a. This figure far exceeds the initially expected scale of several thousand to tens of thousands of units. To achieve this, commercial buildings, offices, and factories will also be converted into rental housing for supply.

According to related ministries including the Ministry of Land, Infrastructure and Transport, the Ministry of Economy and Finance, and the Seoul Metropolitan Government on the 16th, the government plans to announce the "Housing Stability Plan for Low-income and Middle-class" containing these details on the 18th. This jeonse measure is a response to the so-called "jeonse crisis," which has occurred as housing prices in Seoul, the metropolitan area, and provinces have simultaneously risen and jeonse supply has sharply decreased following the implementation of the three lease laws.

A government official stated, "We are reviewing not only purchase rental and jeonse rental but also the purchase agreement method," adding, "We will ensure the supply of 100,000 units + a in Seoul and the metropolitan area."

The government is in the final stages of coordinating measures to maximize the supply of public rental housing that can be provided by the first quarter of next year at the latest, focusing on the metropolitan area.

This plan centers on the Korea Land and Housing Corporation (LH) purchasing vacant houses to rent out ('purchase rental') and leasing them again as jeonse ('jeonse rental').

Since the purchase rental and jeonse rental methods target existing houses, they are expected to have some effect by supplying housing to the market in a short period.

Additionally, the government plans to introduce the 'purchase agreement' method for the first time to secure the maximum supply volume.

The purchase agreement method involves LH signing a purchase agreement before completion for houses (multi-family and multiplex) planned or under construction by private developers, then purchasing them after completion to use as rental housing. However, since this targets houses not yet built, the supply timing may be later than the purchase rental and jeonse rental methods.

Furthermore, the government plans to remodel commercial buildings, offices, and factories into residential use to supply rental housing.

Meanwhile, the current plan does not include expanding the monthly rent tax credit. A government official said, "The monthly rent tax credit is a policy unrelated to jeonse supply," adding, "This plan focuses on expanding the jeonse supply volume." Currently, households without homeownership earning less than 70 million KRW annually receive a monthly rent tax credit benefit up to 7.5 million KRW when residing in houses with a standard market price not exceeding 300 million KRW.

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