Rising Jeonse Prices and Kim Hyun-mi's Slip... Urgent Government Rushes to Increase Rental Supply

Hong Nam-ki Deputy Prime Minister Chairs Real Estate Market Inspection Ministers' Meeting on the 2nd
"Will Rapidly Supply Countermeasure Housing"
Seoul Apartment Average Jeonse Price Rises by the Largest Margin Since KB Statistics Began

Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, is delivering opening remarks at the 'Real Estate Inspection Ministers' Meeting' held at the Government Seoul Office in Jongno-gu, Seoul on the 2nd. Photo by Kang Jin-hyung aymsdream@

[Sejong=Asia Economy Reporters Kim Hyun-jung, Jang Se-hee] The government has decided to expedite the supply schedule for public rental housing announced last month as much as possible. Following the implementation of the Lease 2 Act, the monthly increase in jeonse prices last month recorded the largest rise ever, and public opinion worsened due to Minister of Land, Infrastructure and Transport Kim Hyun-mi's 'apartment bread' remark. In response, the government aims to release the supply as quickly as possible to curb the rising market prices and prevent public discontent.

On the 2nd, Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, held the '11th Real Estate Market Inspection Meeting of Related Ministers' at the Government Seoul Office and stated, "We will promptly supply the announced quantities to stabilize the jeonse market." According to KB Housing Price Trends, the average jeonse price of apartments in Seoul last month was 560.69 million KRW, a sharp increase of 23.9 million KRW (4.5%) compared to the previous month, marking the largest rise in 9 years and 5 months since statistics began in June 2011.

Deputy Prime Minister Hong explained, "To ensure early stabilization of the jeonse market, we will quickly recruit tenants for a total of 39,000 vacant public rental units (16,000 in the metropolitan area, 5,000 in Seoul) by December." He added, "We will convert vacant units into jeonse-type housing and recruit tenants by the end of the year, and any remaining vacant units will be consolidated and recruited as they become ready." Furthermore, he emphasized early implementation by stating, "We will also ensure that the supply effects of public jeonse and newly built purchase agreements become visible early. After a business briefing in mid-month, we will proceed with purchase agreement announcements within the year and recruit tenants before completion as soon as agreements are signed." He also explained that the previously announced 'Quality Lifetime Housing' plan aims to supply 63,000 units over the next five years.

Alongside this, the government plans to expand rental housing supply for the middle class by activating public offering-type REITs and real estate funds utilizing abundant market liquidity. Tax benefits will also be provided to encourage private sector participation. Additionally, Deputy Prime Minister Hong stated, "Efforts to eradicate market disruption activities continue in parallel," adding, "Starting from the 7th, the National Police Agency will conduct intensive crackdowns on illegal activities in the apartment sales market, focusing on nine local police agencies in regulated areas."

The government's announcement today appears to be mindful of the recent public backlash following Minister Kim Hyun-mi's 'apartment bread' remark. Minister Kim compared apartments to 'bread' and said, "We will make them even if we have to stay up all night," which sparked public outrage. She was criticized not only for overlooking the seriousness of the issue but also for distorting the market by viewing the government's 'direct supply' as the sole solution.

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