“Everyone” responds to countermeasures, uninterrupted supply is the key

To date, the nationwide apartment rental price increased 0.3% from the previous week and Seoul by 0.15%, respectively, continuing the upward trend for 63 weeks and 73 weeks. Seoul grew 0.17% in the first week of August, just after the third rental law went into effect, registering the highest growth rate this year, and then the increase eased. The rate of increase in apartment rental prices in the metropolitan area also increased from 0.25% last week to 0.26% this week. The rise in prices nationwide has pushed up the sale of low- to mid-priced apartments and the rate of increase in weekly apartment prices nationwide rose to 0.25%, the largest in eight years and a half since the Korea Appraisal Board was counted on 16.

The government had initially determined that the increase in jeonse prices would decrease within two months. It could have passed as a short-term phenomenon if it had been “blocked for sale” under the application of the 3rd Lease Act. However, in addition to the demand for rental housing due to sales reservations, the demand for rental housing has increased further as the demand for luxury rental housing has increased due to low interest rates. In addition, due to the side effects of the leasing law, concerns have increased over the shortage of supply of jeonse properties in the next two years. The number of apartments in Seoul and Gyeonggi next year is 22,900 and 89,500 respectively, which is only 54% and 73% from this year.

Therefore, the success or failure of this plan will depend on whether or not concerns about the jeonse property supply shortage are resolved. The government will provide 114,000 households nationwide and 70,000 public rental private leases in the metropolitan area by 2022. Avoidance is important. Hence, 65% of the metropolitan area supply in the first half of next year and the supply of jeonse using public rental vacancies where a supply plan for 15,700 households is planned should be regular. In addition to guaranteeing quantity, preparations are needed to attract real demand in terms of relocation and location conditions.