Seoul Mayor Oh Se-hoon has openly criticized President Yoon Suk-yeol's perception of the "normalization of the jeonse market," asserting that the recent jeonse crisis in Seoul is not a natural market change but a result of government policy failures that have led to the collapse of the housing ladder.
On June 8, Mayor Oh expressed his views on Facebook, stating, "The disappearance of jeonse is not normalization but a policy disaster that has destroyed the housing ladder for ordinary citizens," and he pointed out the significant disconnect between the government's perspective and the realities faced by the public.
During a press conference marking his first anniversary in office, President Yoon described the recent decline in jeonse listings and the rise in rental prices as part of a "normalization process," suggesting that the decrease in listings is due to homebuyers entering the market, thus reducing demand.
However, Mayor Oh countered, saying, "The current issue in Seoul's jeonse market is not a decrease in demand but a decrease in supply," criticizing the president's understanding as being out of touch with reality.
He argued that policies such as the expansion of land transaction permission zones across Seoul, stricter residency requirements, stringent loan regulations, and pressure on multiple homeowners are drastically reducing the supply of jeonse. This has resulted in landlords exiting the market, leaving remaining tenants to compete for a dwindling number of available units.
The scarcity of jeonse is becoming increasingly severe in the real estate market. According to the Seoul real estate industry, there have been numerous reports of individuals unable to find jeonse listings for several months.
In the Gwanak District, there is significant demand for jeonse in the 25-pyeong range at around 500 million won, yet many have been unable to find listings for over a month, according to real estate agents.
Mayor Oh also expressed concern about the ongoing trend of converting jeonse into monthly rent. He stated, "While deposits have increased, tenants are now facing the additional burden of monthly rent, which is eroding the disposable income of ordinary citizens and pushing them to the brink of financial hardship."
Jeonse is a unique housing system in South Korea that has historically served as a "housing ladder" for ordinary citizens and young people, allowing them to save money for homeownership. However, recent changes in interest rates, increased regulations, and a decrease in supply have led to a sharp decline in jeonse availability and a rapid rise in the proportion of monthly rent.
Mayor Oh criticized the government's approach, noting that the average price of apartments in Seoul has surpassed 1.3 billion won, while the maximum housing loan limit remains at around 600 million won. He stated, "This means that one needs over 700 million won in cash to purchase a home."
He emphasized the need for urgent dialogue with the president to restore the collapsed housing ladder and improve the quality of life for citizens, stating, "I will ensure that the voices from the field are accurately conveyed to the president."
Oh's remarks are seen as a significant public critique of the current government's overall real estate policies, extending beyond mere administrative concerns.
Given that the instability in Seoul's jeonse market directly affects the pain felt by young people and low-income households, attention is now focused on whether the government will adjust its loan regulations and supply policies in response.
* This article has been translated by AI.
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