Presidential Office Closely Monitoring Recent House Price Rise
Moon Administration Considers Repealing 'Lease 2 Laws'
Yoon: "Comprehensive Measures Before Speculative Demand Arises"
President Yoon Suk-yeol is presiding over a Cabinet meeting at the Presidential Office building in Yongsan, Seoul, on the 30th. [Image source=Yonhap News]
President Yoon Suk-yeol recently emphasized the need to "prevent the expansion of speculative demand" amid the rising housing prices. The government plans to announce a comprehensive plan next month that includes measures to significantly increase housing supply. It is also reported that the repeal of the 'Lease 2 Acts,' enacted during the Moon Jae-in administration, is under consideration.
A presidential office official told reporters at the Yongsan Presidential Office on the afternoon of the 30th that President Yoon said in a recent meeting regarding the real estate market, "If people think prices will rise, they may rise further, so before speculative demand emerges, we need to prepare a comprehensive plan to stabilize the real estate market."
The official explained, "Looking at past cases, when speculative demand rather than actual demand arises, housing prices have surged sharply. Taking that as a lesson, the president emphasized the need to stabilize the market by sufficiently supplying housing before speculative demand appears."
The government is preparing to announce a comprehensive plan to expand housing supply next month. Measures being discussed include speeding up reconstruction and redevelopment, early supply of public land housing in the metropolitan area such as the 3rd New Town, securing additional land in the metropolitan area, and expanding non-apartment housing supply.
In particular, the presidential office is reportedly considering repealing the Lease 2 Acts, which include the right to request contract renewal and the rent ceiling system.
The presidential office views these laws as distorting the market and causing housing price increases. They explain that when the four-year term after contract renewal expires, a compensation mentality arises during new contracts, causing a sharp rise in jeonse (long-term deposit lease) prices.
However, since the Lease 2 Acts are legislative matters, passing them through the National Assembly is difficult without cooperation from opposition parties such as the Democratic Party, which holds a majority of seats. The Democratic Party is opposed to repealing the Lease 2 Acts.
According to the Korea Real Estate Board, as of the fourth week of this month, apartment sale prices in Seoul rose by 0.30% compared to the previous week. This is the largest increase in 5 years and 10 months since the second week of September 2018. Seoul apartment jeonse prices have also been rising for 62 consecutive weeks.
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