Kim Hyun-mi "Supplying High-Quality Housing in Seoul and the Metropolitan Area... Rent and Lease Market Will Stabilize"

Site Visit to Maeim Rental Housing in Daejo-dong, Eunpyeong-gu, Seoul
"Increasing Unit Prices to Purchase and Supply More Houses"

Minister of Land, Infrastructure and Transport Kim Hyun-mi is visiting a purchased rental housing unit in Daejo-dong, Eunpyeong-gu, Seoul on the 22nd to inspect the living space. (Photo by Ministry of Land, Infrastructure and Transport)

[Asia Economy Reporter Moon Jiwon] On the 19th, Kim Hyunmi, Minister of Land, Infrastructure and Transport, stated, "The newly introduced 'public jeonse housing' type has significantly increased the purchase price to an average of 600 million KRW in Seoul," adding, "We can supply high-quality housing in prime locations in Seoul and the metropolitan area."

She explained that if a large number of such high-quality houses are supplied to the market through this jeonse policy, the recently spreading jeonse crisis will also be resolved.

Minister Kim expressed this expectation after visiting a purchased rental housing located in Eunpyeong-gu, Seoul, on the same day. Purchased rental housing is a house where a public housing operator buys newly built houses constructed by the private sector and provides them at rents less than half of the market price.

The government announced the 'Support Plan for Housing for Low-income and Middle-class' on the 19th and revealed plans to supply 114,000 houses nationwide in jeonse form by 2022. Purchased rental housing is a key supply measure in this plan.

The government plans to raise the maximum purchase price of houses, currently around 300 million KRW, to 600 million KRW in Seoul, 400 million KRW in the metropolitan area, and 350 million KRW in other regions for public jeonse, and expand the area to around 30 pyeong (approximately 99 square meters).

Additionally, to encourage participation from private construction companies, construction funds will be supported at low interest rates of around 1%, and companies with many rental supply achievements within urban areas will be given priority in public land supply.

The house Minister Kim visited that day is a mid-sized unit (57㎡) with three rooms, located within a 10-minute walk to an elementary school and a subway station.

Minister Kim emphasized, "Currently, only about 30% of the purchase volume requested by the private sector is being acquired due to price standards and conditions, but with the price increase, we will be able to purchase and supply more houses," adding, "Over the next two years, through agreements with the private sector, we will quickly supply high-quality newly built houses throughout urban areas to promptly absorb jeonse demand."

She continued, "If an additional 114,000 houses are supplied by 2022, housing supply exceeding the usual level will be achieved, stabilizing the housing market and the jeonse and monthly rent markets," and explained, "From 2023 onwards, 1.27 million houses in the metropolitan area will be actively supplied through the 3rd New Town projects and urban renewal projects, further stabilizing the housing market."

Minister Kim added, "The government will do its best to ensure that the results of new supply quickly lead to residential stability for the people and that housing policies centered on low-income and actual demanders are implemented without any setbacks."

Minister of Land, Infrastructure and Transport Kim Hyun-mi is visiting a purchased rental housing in Daejo-dong, Eunpyeong-gu, Seoul on the 22nd and receiving an explanation. (Photo by Ministry of Land, Infrastructure and Transport)

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