Transition to Private-Led Rental Housing Supply
Concerns Over 'Jeonse Crisis' in August... Possible Inclusion in '2.5 Million Housing Supply Roadmap'
[Asia Economy Sejong=Reporters Haeyoung Kwon, Minyoung Kim] The government is pushing to revive the 'Apartment Registered Rental Business Operator' system, which was abolished in 2020, to expand the supply of private monthly rent and lease housing. While the previous Moon Jae-in administration labeled multi-homeowners as speculators and blamed them as the main cause of soaring house prices, the new government is interpreted as recognizing multi-homeowners as participants in the rental market and intends to implement rental housing supply policies led by the private sector.
According to the government on the 27th, it has decided to revive the Apartment Registered Rental Business Operator system and is preparing related institutional improvements. To prevent a 'jeonse crisis'?a sharp rise in rental prices?two years after the implementation of the two rental laws (contract renewal request right and monthly rent ceiling system), it is expected to be included in the '2.5 million housing supply roadmap' to be announced around mid-August. ▶Related article page 4
Several government officials stated, "Considering the housing sales and rental market situation, we are examining ways to gradually normalize the abolished Apartment Registered Rental Business Operator system," adding, "Although the timing of implementation is being carefully reviewed due to concerns about stimulating house prices, if the housing sales market stabilizes, the Apartment Registered Rental Business Operator system can be revived."
Previously, the Moon Jae-in administration completely abolished the Apartment Registered Rental Business Operator system in 2020, which provided various tax benefits. However, since the private sector's contribution to supply in the rental market is significant and housing demand prefers apartments, it is pointed out that allowing only non-apartment registered rental business operators, as is currently the case, makes it difficult to stabilize the unstable monthly rent and lease market. This is why the government included in its national agenda implementation plan the allowance of apartment registered rentals mainly for small units and support for tax benefits (exemption from capital gains tax surcharges, special provisions for residential housing, exclusion from comprehensive real estate tax aggregation, etc.). Above all, from August, marking two years since the implementation of the two rental laws, there is a high possibility that landlords who have not raised rents so far will increase them all at once, raising concerns about instability in the monthly rent and lease market. The government also judges that the recently announced expanded tax support for cooperative landlords alone will have limited effects on stabilizing the rental market.
The variable is that the revival of the Apartment Registered Rental Business Operator system could ignite a spark that stimulates the recently stabilizing housing sales market. A government official said, "We will comprehensively consider the sales and rental markets to decide on whether and when to implement the system."
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