[Column] Real Estate Public Sentiment Bruised by 'Word Feast'

On the 20th, Jin Sun-mi, head of the Future Housing Promotion Team of the Democratic Party of Korea, along with lawmakers, toured the rental housing building at LH Purchased Rental Housing Seodohuvil located in Gangdong-gu, Seoul, during an on-site meeting for the housing welfare project. (Provided by Jin Sun-mi's office) [Image source=Yonhap News]

[Asia Economy Reporter Lee Chun-hee] "Are they just talking about policies without presenting any proper alternatives?" This is the reaction from industry insiders to the remarks coming from the ruling party and government following the government's announcement of the Jeonse (key money deposit) measures on the 19th.

In fact, the flood of statements from policy authorities over the past weekend did little to calm the anxiety of tenants struggling with the Jeonse crisis; instead, it only fueled their anger. This is because the evaluations of the policies by government and ruling party officials were nothing but self-praise.

Following the remarks by Minister of Land, Infrastructure and Transport Kim Hyun-mi, who called it a "precious achievement reached through social consensus," First Vice Minister Yoon Sung-won defended the three lease laws, the root cause of the Jeonse and monthly rent crisis, saying it is a "growing pain the economy must go through." Additionally, Jin Sun-mi, head of the Democratic Party's Future Housing Promotion Team, stirred controversy by saying, "If we abandon illusions about apartments, we can be confident that rental housing can also provide quality living."

The market's response is one of disbelief. The core issue of the Jeonse crisis is the shortage of apartment supply, yet the government's market perception seems to be akin to saying, "If there is no bread, eat cake." According to the government's Jeonse measures, the total supply volume is 114,000 households, but only about 30,000 of these are apartments. The situation is even more severe in Seoul, where out of 35,300 households, only about 2,000 households, or 5.5%, are apartments. This volume raises doubts about whether the supply shortage can be resolved.

Minister of Land, Infrastructure and Transport Kim Hyun-mi is visiting a purchased rental housing located in Eunpyeong-gu on the 22nd and inspecting the interior. [Image source=Yonhap News]

The government has continuously pursued policies to reduce rental supply in an effort to control the sales market, and with the addition of the three lease laws, new Jeonse listings have become as rare as stars in the sky. People searching for Jeonse homes outside Seoul are doing so not by choice but because they have been "pushed out."

Yet the government still insists that "the policy is correct." Even after unilaterally implementing the contract renewal request system and the Jeonse and monthly rent cap system hastily, they repeatedly claim there is no significant problem, citing "social consensus" and "growing pains."

Even the top official responsible for the government's real estate policy remains indifferent to the side effects despite being caught in the trap of the two lease laws. This is Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance. Under pressure from the Blue House to be a "one-home owner," he tried to sell his apartment in Uiwang, but when the tenant exercised the contract renewal request right, he was left in a dilemma. Ultimately, he paid the tenant compensation to vacate.

One of the comments frequently attached to articles conveying these statements is "Just do nothing." If the government continues to rely solely on words without proper policies as it is now, it might actually be better for the mental health of the public to do nothing at all.