SK FINANCE CHIEF LOSES HOME DUE TO HIS HOUSING POLICY
South Korea’s finance minister, the architect of rules aimed at protecting tenants and slowing deposit increases, has himself been forced to look for a new home as landlords react to the rules by quickly replacing tenants so they can bump up deposits, Cynthia Kim reported for Reuters.
Hong Nam-ki is also faced with broadening his search as the average deposit where he lives 20 minutes from parliament has soared by a third since his housing rules took effect in July, with the irony of his predicament setting the internet alight. “Worse comes to worst, he can camp by the Presidential Blue House, right?” one netizen asked on a real estate forum.
Seoul apartment prices have risen more than 50% since the left-leaning President Moon Jae-in inherited loosened mortgage rules from the previous administration three years ago. To slow buy-to-rent demand, the Housing Lease Protection Act, led by Hong, capped increases of “jeonse” deposits at 5% and allowed tenants to extend standard two-year contracts for another two, unless landlords themselves move into the property. Jeonse is a lump-sum returnable deposit paid instead of monthly rent.
Landlords invest the deposit and pocket returns.
The Act led to an unprecedented shortage of jeonse housing nationwide as landlords sought to empty properties ahead of the July implementation so they could increase deposits for new tenants, expecting not to be able to raise them again for four years. In Hong’s case, his lease ends in January, at which time his landlord is set to move into the property, a realtor citing an industry database told Reuters, echoing local media reports. “My fellow landlords, let’s not rent out to Hong, let him suffer!” wrote another netizen on the popular real estate forum. “Let’s make him feel what the government has done!”