[Initial Perspective] Can You Create a Country Without 'Jeonse Queueing'?

[Asia Economy Reporter Lee Ji-eun] "We will also make special efforts to ensure the housing stability of the people. We will firmly stabilize the jeonse market by early settling the Lease 3 Act and supplying high-quality medium-sized public rental apartments."

There was a notable point in President Moon Jae-in's policy speech at the National Assembly on the 28th. While most of the speech was devoted to explaining the necessity of a large-scale budget of 556 trillion won, including the "Korean New Deal," "housing stability for the people" was also mentioned. In particular, the fact that he specifically mentioned the "jeonse market" was evidence that President Moon also takes the "jeonse crisis" seriously.

The jeonse market, especially in Seoul, is experiencing a crisis. It is fortunate if there is even one or two jeonse listings in large apartment complexes, and even those are rare. Moreover, prices in areas where listings exist have jumped sharply in a short period, making it difficult for people who remember previous prices to feel comfortable making transactions. A symbolic example of this was a photo taken in mid-month showing about ten groups lined up waiting for their turn to view an apartment in Gayang-dong, Seoul. Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki almost became a "jeonse refugee" but was eventually able to sell his apartment in Uiwang by paying money to the tenant. This is also why Minister of Land, Infrastructure and Transport Kim Hyun-mi's repeated claims that "jeonse prices have stabilized" fail to convince the market.

The jeonse crisis was already predicted. On July 7th, Yoon Hee-sook, a member of the People Power Party, criticized the Lease 3 Act at the plenary session of the National Assembly, stating, "There will be no more jeonse." The Lease 3 Act, intended to protect tenants, has disadvantaged landlords, leaving them no choice but to raise prices or exit the market. The Ministry of Land, Infrastructure and Transport argued, "It is not because of the Lease 3 Act but due to low interest rates." However, it is inevitable to feel some regret that the ruling party with 176 seats did not listen more to the opposition's voices during the law's passage.

The problem starts now. The autumn moving season has roughly ended, and since moving demand is relatively low in winter, concerns about a crisis due to jeonse shortages are less. However, after winter, the spring moving season returns. In spring, coinciding with the new school term, jeonse prices tend to soar every year even without special factors. If this is combined with the already predicted jeonse shortage, parents with children about to enter school will be deeply worried.

President Moon stated that the jeonse crisis would be resolved with "high-quality medium-sized public rental apartments," but trying to solve the current jeonse crisis with rental apartments that have not yet been built is illogical. The "monthly rent tax credit" card is also likely to only somewhat alleviate the burden on people who reluctantly switch to monthly rent rather than solve the jeonse crisis. This is why the eyes of the non-homeowners are focused on the jeonse measures the government is preparing. It is urgent to present realistic policies that satisfy actual demanders, not policies that are merely superficial.

Recently, a national petition by a young person claiming "I gave up marriage because of the Moon Jae-in government's real estate policy" has become a hot topic. This young person said, "I grew up under excellent parents, received good education as a middle-class member of society, and was planning to marry a partner who is also a middle-class, diligent worker since early this year. However, in this country, people who pay taxes faithfully and live every day with effort are facing a situation where it is difficult to find even one jeonse house in Seoul. The housing crisis is making me give up marriage." The voices of frustration from young people, saying that the reason they do not marry is because of real estate issues, must not be ignored by the Blue House or the political circles.