Land, Infrastructure and Transport Minister Hong Ji-sun said the main driver of rising jeonse (a lump-sum deposit lease) and monthly rents is a drop in new move-ins caused by sluggish construction starts, stressing that "the fundamental solution is supply."
Minister Hong posted the comments on X late on the 21st in a message titled "We are listening closely to concerns about rent burdens."
"Housing permits and construction starts in Seoul rose more than 40% from a year earlier in the January-to-August period, and about 100,000 public housing units in the greater Seoul area will be ready for occupancy by the end of next year," the minister said. "We will also expand 20-year long-term private rental housing and universal public rental housing to widen the range of options where people can live with peace of mind over the long term."
Minister Hong characterized the recent decline in jeonse transactions and the rise in monthly rent deals as a structural shift in the rental market.
"The shift from jeonse to monthly rent reflects a structural change in the rental market, driven by the growing number of single-person households and the fallout from jeonse fraud," the minister said. "The government has been expanding support to ease the public's housing cost burden amid this change."
Minister Hong added that non-homeowner wage earners with total annual pay of 80 million won ($55,800) or less who live in qualifying homes can deduct 15% to 17% of their monthly rent from their taxes, based on up to 10 million won of annual rent paid. "If total annual pay is 55 million won or less and monthly rent is 1 million won, the deduction can reach up to 1.7 million won a year," the minister said. Minister Hong also noted that the government provides up to 200,000 won a month in rent support for young adults, adding, "We will continue to look for ways to ease the monthly rent burden."