“My husband and I, who have not had a major fight in 20 years, are fighting almost every day. There was a time when we were able to buy an apartment, but we trusted the government to set the house price and waited,” said a 47-year-old petitioner who introduced himself as the head of a family. This is the complaint that was posted on the Blue House public petition bulletin board on the 30th of last month.
He appealed, “It is said that a 300 million-won jeonse house will cost 550 million won. No matter how hard you try and how much you think, there is no hole where 250 million won will come out.” Then he asked, “What kind of work can I legally make 250 million won without stealing, without robbery, without selling drugs, without fraud?”
At the end of July last year, a new lease law (right to apply for contract renewal, maximum monthly rent system) was enforced to protect tenants, but a year later, this law became an evil law harassing tenants. More and more tenants are complaining about the sharp rise in Jeonse prices.
When the JoongAng Ilbo surveyed 1116 apartment complexes in the Seoul area on the 1st, there were four complexes where the Jeonse price had doubled (100%) or more over the past year. As the petitioner claimed, the number of complexes whose Jeonse price increased by more than 50% was 7.8% (87 places), and as the petitioner claimed, the number of complexes whose Jeonse price increased by more than 250 million won was also found to be 12.3%, or 137. A comparison of the highest price of deposits for deposits in 1116 apartment complexes (based on 84 m2 of exclusive area) with 3 or more jeonse transactions during the last 5 months of this year and 5 months before the enforcement of the lease law at the end of July last year, when actual transactions were registered in the public system of the Ministry of Land, Infrastructure and Transport. result.
The average price of the highest deposit for Jeonse deposits for the surveyed complexes rose by 148 million won (25.3%) in one year. In some complexes with a large increase in Jeonse price, the ‘double price’ phenomenon, in which the difference between the Jeonse price of the new contract and the renewal contract is more than several hundred million won, is serious. In the case of Trimaje in Seongsu-dong 1-ga, Seongdong-gu, based on an exclusive area of 84 square meters, the difference in the total price of new (2.45 billion won) and renewal (800 million won) contracts widened to 1.65 billion won over the past five months.
As the shortage of jeonse continued for nearly a year, the highest price for jeonse rose. According to Asil, a real estate information provider, as of the 1st, the number of apartments for sale in Seoul was 21,141, a decrease of 84% compared to a year ago (37,107). In particular, it is difficult to estimate the ceiling of the Jeonse price as the demand for reconstruction and relocation overlapped with the decrease in the number of apartment move-ins in the Seoul area.
As the supply failed to keep up with demand, some popular school districts, such as Gangnam and Mok-dong, said, ‘It’s worth the price to pay the rent’. In the case of the 84.87㎡ exclusive area of Mokdong New Town Complex 14, the highest price was traded at 1.162 billion won on May 28, which is a 382 million won increase from 780 million won on the 1st of the same month.
There are also many complexes where the pre-set price cannot be estimated. In the case of Donga Cheongsol, Dobong-gu, the 9th floor, with an exclusive area of 84 square meters, signed a global contract with the highest price of 944 million won on May 20. However, the lowest price among 10 jeonse transactions in the past three months was 315 million won (April 27). Looking at the price range of jeonse contracts, there were 4 cases of less than 400 million won, 4 cases of more than 400 million won and less than 600 million won, and 2 cases of more than 600 million won. Beyond the ‘double price’, a ‘triple price’ was formed.
The lease law limits the maximum price that can be raised to 5% when renewing jeonse, but recently, there are many cases where the price is raised higher than that due to an agreement between the landlord and the tenant. In the process, a new price range was formed between the renewal contract (lowest price) and the new contract (highest price), resulting in a ‘triple price’.
Mr. Park, in his 40s, who lives in Seodaemun-gu, Seoul, recently decided to renew the contract at 70% of the highest price after an argument with the landlord who said “I will live” ahead of the renewal of the global contract. This is an increase of 200 million won from 550 million won, but the current jeonse of this complex is traded at 900 million to 1 billion won.
Park said, “It is difficult to confirm whether the actual landlord is actually living there, and the rental price has risen so much that I couldn’t even think of moving.” .
The government is busy praising itself, saying, “After the enforcement of the Lease Act, the lease renewal rate was 77% (based on the top 100 apartments in Seoul),” and “a large number of tenants are benefiting.” However, the number of renewal cases in which the rental price was raised to 5% or less by using the right to renew the contract was found to be less than this. According to the Ministry of Land, Infrastructure and Transport, out of 13,000 nationwide renewal contracts in the month of June, when the rental report system was introduced, the rate of using the right to renew the contract was 63.4%, or 8,000.
Experts are calling for a reexamination of the lease law, which is aggravating market chaos. Heo Yun-kyung, head of the Economic and Financial Research Department at the Korea Construction Industry Research Institute, insisted, “It is necessary to suspend the enforcement of the lease law, which started the jeonse crisis, for the time being.” However, the ruling party is even showing a movement to expand the target of price control to new contracts. Seo Jin-hyeong, president of the Korean Real Estate Association (professor at Kyungin Women’s University), said, “There is no market that can beat supply, so it is urgent to find a way to dramatically increase supply instead of price control policy.”
Correspondent Kim Won [email protected]