Korean land minister says supply is the fix for rising monthly rent burden
In short
Land, Infrastructure and Transport Minister Hong Ji-seon (홍지선) said in a post on X that worries about monthly rent burdens are being taken seriously and that the fundamental solution is supply. Hong said the biggest cause of rising jeonse and monthly rent prices is fewer move-in units because construction starts lagged, and listed existing and planned support measures.
Read the full story 2 min read
Hong Ji-seon (홍지선), minister of Land, Infrastructure and Transport, said worries about the burden of monthly rent are being heard heavily and that the government will keep looking for ways to ease it. Hong said the fundamental solution is supply. [ 1 , 2 , 3 ]
Hong made the remarks in a post on X on the night of the 21st. According to Newsis and Dong-A Ilbo, Hong wrote that since the early 2020s the trend of fewer jeonse contracts and more monthly rent contracts has been accelerating, and that concerns this change could lead to a housing cost burden are taken seriously. Yonhap said the post carried a title about hearing worries over the monthly rent burden heavily. [ 1 , 2 , 3 ]
Hong said the shift from jeonse to monthly rent is not so much a sudden recent phenomenon as a structural change in the rental market linked to the growth in one-person households and the aftermath of jeonse fraud. Hong said the government has widened support to reduce housing costs during this change. [ 1 , 2 , 3 ]
On tax, Hong said workers who own no home and have total pay of 80 million won or less can deduct 15-17% of their monthly rent from tax, up to 10 million won a year. Hong gave the example of a worker with total pay of 55 million won or less who pays 1 million won a month, who can deduct up to 1.7 million won a year. Youth monthly rent support is up to 200,000 won a month, Hong said. [ 1 , 2 , 3 ]
Newsis and Dong-A Ilbo added that Hong said income criteria for youth monthly rent support will be eased from next year so more young people receive it. They also reported that a project that converts private monthly rent listings into public jeonse form is going ahead, and that Hong said a call for proposals for the trust arrangement, which the landlord uses like monthly rent and the tenant like jeonse, will be held within the year. [ 1 , 2 ]
On supply, Hong said the biggest cause of rising jeonse and monthly rent prices is the drop in move-in volume caused by sluggish construction starts. Hong said housing permits and construction starts in Seoul in January to August this year were up by more than 40% from the previous year, and that about 100,000 public housing units in the Seoul metropolitan area will be occupied by the end of next year. Hong said the government will also expand 20-year long-term private rental and universal public rental housing to widen the choices for people who want to live securely for a long time. [ 1 , 2 , 3 ]
Why it matters
The minister's post sets out the government's position on the shift from jeonse to monthly rent contracts and on housing costs. The documents give no data on whether the measures will lower rents.
Key facts
- Minister Hong Ji-seon of the Ministry of Land, Infrastructure and Transport posted on X on the night of the 21st that worries about monthly rent burdens are heard heavily and that the government will keep looking for ways to ease them. [ 1 , 2 , 3 ]
- Hong said the biggest cause of rising jeonse and monthly rent prices is a drop in move-in volume caused by sluggish construction starts, and that the fundamental solution is supply. [ 1 , 2 , 3 ]
- Hong said housing permits and construction starts in Seoul in January to August this year rose by more than 40% from a year earlier, and that about 100,000 public housing units in the Seoul metropolitan area will be occupied by the end of next year. [ 1 , 2 , 3 ]
- Hong said workers who own no home and have total pay of 80 million won or less can deduct 15-17% of monthly rent from tax, up to 10 million won a year, and that a worker earning 55 million won or less who pays 1 million won a month can deduct up to 1.7 million won a year. [ 1 , 2 , 3 ]
- Youth monthly rent support is up to 200,000 won a month, and Hong said income criteria will be eased from next year. [ 1 , 2 ]
- Hong said a project that converts private monthly rent listings into public jeonse form will go ahead, with a call for project proposals within the year. [ 1 , 2 ]
Confirmed by several sources
- Hong described the shift from jeonse to monthly rent as a structural change in the rental market linked to more one-person households and the aftermath of jeonse fraud. [ 1 , 2 , 3 ]
- Hong named supply as the fundamental solution and said the biggest cause of rising jeonse and monthly rent prices is lower move-in volume after sluggish construction starts. [ 1 , 2 , 3 ]
- Hong gave the tax deduction terms for monthly rent: 15-17% of rent, up to 10 million won a year, for workers who own no home and have total pay of 80 million won or less. [ 1 , 2 , 3 ]
Still unclear
- How much the support measures and supply plans will reduce monthly rent burdens. The documents report the minister's statements and give no figures on the expected effect.
- How far youth monthly rent income criteria will be eased from next year, and when the trust project proposal call will open. The documents say only that the criteria will be eased from next year and that a call for proposals will be held within the year, and these points appear only in the Newsis and Dong-A Ilbo texts, not in the Yonhap text.