Hong Ji-sun, Minister of Land, Infrastructure and Transport, has attributed the decline in jeonse transactions and the rise in monthly rent to structural changes driven by an increase in single-person households and the impact of rental scams. She emphasized that expanding support measures to alleviate the burden of monthly rent, along with increasing housing supply, is essential for a fundamental solution.
On October 22, the Ministry of Land, Infrastructure and Transport reported that Minister Hong posted on her X account the previous night, stating, 'I am deeply concerned about the burden of monthly rent,' outlining the government's response to the trend of converting jeonse to monthly rent.
Minister Hong noted, 'The shift from jeonse to monthly rent is not a sudden phenomenon but rather a structural change in the rental market due to the increase in single-person households and the aftermath of rental scams.' She added that the government has been broadening support to reduce the housing cost burden on citizens amid these changes.
She also highlighted tax support aimed at easing the burden of monthly rent. Currently, tenants with an annual income of less than 80 million won can receive a tax deduction of 15-17% on monthly rent, up to a limit of 10 million won per year, provided they meet certain criteria. Additionally, support for young renters is currently being implemented.
Hong identified the primary cause of rising rental prices as a decrease in available housing units due to sluggish construction starts. 'The main reason for the increase in rental prices is the decline in available units resulting from slow construction,' she emphasized, stating that the fundamental solution lies in increasing supply.
She further explained that from January to August this year, housing permits and construction starts in Seoul increased by over 40% compared to the same period last year, with approximately 100,000 public housing units expected to be completed in the metropolitan area by the end of next year.
Moreover, the government plans to expand the supply of long-term private rentals and universal public rentals to provide tenants with more stable housing options.
Meanwhile, in the actual rental market in Seoul, the proportion of monthly rent transactions has surpassed half. According to the Seoul Real Estate Information Plaza, from January to September this year, there were 87,870 monthly rent transactions for apartments in Seoul, accounting for 51.0% of the total rental transactions of 172,227. This marks the first time since the collection of related statistics began in 2011 that the proportion of monthly rent transactions has exceeded 50%.
* This article has been translated by AI.
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