Seoul Mayor Oh Se-hoon Warns of "Jeonse and Monthly Rent Hell" as Average Rent Hits 1.62 Million Won

▲ Seoul Mayor Oh Se-hoon

Seoul Mayor Oh Se-hoon stated that the entire city of Seoul is suffering from a severe crisis in jeonse (lump-sum housing deposits) and monthly rent markets, urging the government to come up with measures to revive the private rental market.

In a Facebook post titled "Jeonse and Monthly Rent Hell, Extraordinary Measures Are Needed," Mayor Oh criticized, "Seoul is turning into a 'housing hell' due to the jeonse and monthly rent crisis," adding, "Desperate cries are erupting everywhere that people are being driven out as jeonse refugees and can no longer afford to live in Seoul."

He pointed out, "The average monthly rent for Seoul apartments in July hit an all-time high of 1.62 million won," noting that "jeonse prices have soared by 9.95%, and the drought of available jeonse properties continues."

Mayor Oh wrote that he has heard reports that the government is considering ways to lower the comprehensive real estate holding tax burden for corporate rental business operators.

At the same time, he described this as "belated," stating, "Since last year, I have repeatedly emphasized that the government should not view rental business operators merely as targets for regulation, but recognize them as providers of stable jeonse and monthly rental housing."

He further emphasized, "I have demanded that loan regulations be eased and that purchased rental business operators be excluded from the comprehensive real estate holding tax aggregation so they can sufficiently supply jeonse and monthly rental housing."

While noting that the government's current review of these measures is positive, Mayor Oh urged, "This level is vastly insufficient to resolve the current jeonse and monthly rent crisis," and called on the government to "promptly release extraordinary measures to revive the private rental market."

According to Mayor Oh, registered private rental housing in Seoul stands at 407,000 households, accounting for about 20% of all rented homes.

Registered rental business operators also reach approximately 93,000 people.

While these individuals have received tax special exceptions in exchange for complying with mandatory rental periods set by the government and accepting restrictions on rent increases, Mayor Oh conveyed that those benefits were abolished through the August 3 tax system revision.

Mayor Oh pointed out, "If registered rental business operators are stigmatized as speculators and existing tax benefits are eliminated, some properties may move to the sales market," but warned, "At the same time, homes where tenants could live long-term without worrying about rent increases or contract terminations will disappear, and the damage will fall back on ordinary citizens."

He expressed concern, saying, "In Seoul alone, the mandatory rental period for more than 20,000 registered rental apartments is scheduled to expire this year, and about 30,000 households are projected to expire by 2028," adding, "I cannot shake the fear that the jeonse and monthly rent hell we are experiencing now may only be the beginning."

Mayor Oh stated, "Private rental business must be institutionalized as one of the pillars for supplying stable rental housing," and added, "We must establish a legal definition for corporate private rental business operators and clearly regulate their support and obligations to form a stable rental market."

He also added, "Registered rental business operators should likewise be utilized within a predictable system as entities that supply stable rental housing on behalf of the state."

In addition, Mayor Oh emphasized, "The fundamental solution to resolving the jeonse and monthly rent hell is to completely review the real estate policy stance centered on 'actual residence,'" and stressed, "A dichotomous approach where only actual residence is considered good can neither stabilize housing prices nor revive the jeonse and monthly rent market."

(Photo: Yonhap News)

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