Hong Ji-sun, the Minister of Land, Infrastructure and Transport, identified a shortage of housing supply as the fundamental cause of instability in the rental market. She acknowledged that regulations on private rental businesses and the strengthening of actual residence requirements may have contributed to the decrease in rental availability.
During a comprehensive audit at the National Assembly's Land, Infrastructure and Transport Committee on October 23, Minister Hong responded to Democratic Party lawmaker Jeong Il-young's concerns about the impact of regulations on private rental businesses and actual residence requirements on rental supply. "The fundamental solution to the rental crisis lies in the supply that does not meet demand," she stated, adding that the effects of reduced permits and construction over the past three years are now becoming evident.
Lawmaker Jeong argued that since it takes time to increase new housing supply, existing housing regulations should be eased to allow more properties to enter the rental market. He specifically pointed out that the tightening of actual residence requirements has led to a reduction in rental availability and an increase in monthly rent conversions.
In response, Minister Hong acknowledged these concerns as contributing factors but noted that the regulations are limited to certain areas in Seoul and the metropolitan region. She explained that even in regions without such regulations, the availability of rental properties is decreasing, exacerbating the rental crisis.
Minister Hong also addressed the relationship between expanding housing supply and the potential for a sharp decline in housing prices. When questioned by People Power Party lawmaker Kang Dae-sik about the correlation between normalizing housing supply and the risk of price drops, she clarified, "There is no direct relationship; various factors influence housing prices."
She added, "Supply continues to expand, and increases in benchmark interest rates and mortgage rates are also anticipated."
* This article has been translated by AI.
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