Government Jeonse Measures Receive Harsh Criticism in the Market

[Asia Economy Reporter Yoo In-ho] Harsh criticism is emerging regarding the government's jeonse (long-term lease) measures in the real estate market. This is because it is difficult to meet the location and quality expectations of middle-class demanders. There are predictions that the measures will remain mere temporary fixes.

The main point of the jeonse measures announced by the government on the 19th is to gather as many available housing units as possible and supply more than 114,000 households by 2022, while significantly improving the quality of public rental housing to disperse demand concentrated on general rentals, thereby easing the jeonse shortage.

The government introduced the jeonse measures because jeonse and monthly rent prices have surged since the implementation of the two lease laws.

According to statistics from the Korea Real Estate Board, the nationwide apartment jeonse price increase rate decreased from 0.14% in the second week of July to 0.20% in the first week of August, and 0.16% in the second week of last month, but jumped sharply to 0.27% in the second week of this month.

However, the government's approach is detached from reality. This is because it is limited to supplying non-apartment units such as multi-family houses or officetels, which are not closely related to the jeonse crisis.

In Seoul and other metropolitan areas, apartment prices have risen so much that it is difficult to find purchase rental units, there is no land to build additional apartments, and construction takes about three years, so apartments are not considered a solution to the immediate jeonse shortage.

In fact, looking at the jeonse price increase rates nationwide from July to October, multi-family houses rose by 0.38%, while apartments increased by 2.22%, nearly six times higher.

As apartments have become the standard for residence due to convenient parking and good security, not only families with children but also most newlyweds try to live in apartments whenever possible.

Therefore, experts say that supplying rental housing mainly consisting of multi-family houses rather than apartments will not be sufficient to effectively solve the jeonse shortage.

Since integrating medium-sized rentals and rental housing types is a policy task that takes several years, there are criticisms that there are limits in the current jeonse market where tenants are struggling to find homes immediately.

The remodeling plans for commercial buildings, offices, and lodging facilities are limited to use for one- or two-person households, and the market views that it will be difficult to have a significant effect on households with three or more members.

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