[2020 National Audit] Hong Nam-ki "No Review of Standard Rent or Jeonse/Monthly Rent Cap... Measures to Be Prepared Without Conflict with Current Policies"

[Image source=Yonhap News]

[Sejong=Asia Economy Reporter Kim Hyunjung] Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, stated on the 23rd that there has been no consideration of a standard rent system or a cap on monthly rent increases to stabilize the jeonse market. He explained that measures would be prepared within the scope that does not conflict with current policies.

On the same day, during the comprehensive audit of the National Assembly's Planning and Finance Committee, when Ki Dong-min, a member of the Democratic Party of Korea, emphasized the need for jeonse measures, Hong said, "The government also believes that a certain level of response is necessary to stabilize the market regarding jeonse measures."

He explained, "I have reviewed jeonse measures over the past 10 years," adding, "There are many jeonse measures during the process of falling sales prices, but when trying to support jeonse, it tended to affect the sales market again, causing sales prices to rise in the past." He continued, "Various measures can be taken for jeonse, but they often conflict with measures to stabilize the real estate market, making them difficult to adopt easily. Nevertheless, whether small or large measures, the government is reviewing everything possible in close cooperation with related ministries."

He also expressed the intention to focus especially on stabilizing the jeonse market among real estate measures. He emphasized, "A significant portion of our work is focused on policy efforts toward stabilizing the jeonse market," and added, "We will work harder." However, regarding the introduction of a standard rent system, he mentioned, "There has been no consideration." He also emphasized that there has been no review of a cap on monthly rent increases for new contracts.

He went on to say, "With the introduction of the Lease 3 Act's right to request contract renewal, most jeonse tenants are benefiting," but added, "However, those to whom the right does not apply bear a burden." Regarding the sales market, he explained, "It is true that the government's measures have caused a shortage of listings," but added, "However, the significant reduction in gap investments can be confirmed by statistics, and a considerable amount of corporate listings has also been observed."