Hong learns a lessonTop government officials’ strange denial of reality continues. Even amid a critical dearth of apartments for jeonse (long-term deposit rentals) in Seoul as a result of the government’s attempts to crack down on real estate profiteering, Hong Nam-ki, deputy prime minister for economic affairs, reportedly claimed that apartments for jeonse increased. The remarks he made in an undisclosed high-level meeting on Sunday among members of the ruling Democratic Party (DP), government and Blue House show how detached the Moon Jae-in administration is from realty. In an earlier meeting with related ministers, Hong allegedly insisted that the Moon administration’s real estate policy has started to take effect.
We are deeply concerned about such lopsided perceptions about what’s really going in the market. To correct any fallout from their foolish policies, government officials must obtain a grasp on reality. If they choose to reinforce unnecessary regulations on the market, that will certainly deepen housing angst among ordinary citizens.
Contrary to the deputy prime minister’s beliefs, trade volume of apartments in Seoul dwindled by a whopping 57 percent in September compared to the previous month, while jeonse prices have surged for 68 consecutive weeks. The same phenomenon took place elsewhere too. A recent survey of 1,798 apartment complexes across the country — each with over 1,000 units — showed that in 72 percent of them, less than five units were offered for jeonse and 390 complexes did not offer any apartments for jeonse.
The intensifying jeonse crisis has become so severe that when an offering comes up, more than 10 applicants compete to rent it. All that has built up is the result of the Moon administration and the DP’s stifling regulations on real estate deals through three controversial bills to protect the rights of tenants.
Deputy Prime Minister Hong himself is a victim of the real estate regulations. As it turned out, he could not sell his own apartment in Gyeonggi after his tenant exercised the right to demand an obligatory extension of the lease. And that’s not all. Hong has yet to find an apartment for jeonse in Seoul even though his contract with his landlord expires in January after the owner decided to live there to avoid big taxes. Hong himself faces a real estate conundrum. Welcome to the club, Mr. Deputy Prime Minister.
If even a high government official experiences such hardship renting a home, how difficult can it be for ordinary citizens? Perhaps Hong might have more of a heart to listen to their complaints from now on.