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With the country reeling from the worst property-market slowdown since 2004., the Korean government
stepped up and announced a set of measures. designed to stabilize the nation's housing
market. But will stimulating sales help bring down
skyrocketing rents? Our Park Ji-won has more. The government's
new housing plan aims to encourage home buying and to stabilize monthly rent. and jeonse
prices, which have been soaring in recent years.
Jeonse is the unique Korean housing system,. that requires renters to deposit a lump sum
of money that is paid back when lease contracts expire.
Jeonse prices have skyrocketed recently to well over two-thirds the value of homes.
In an attempt to address the instability in the housing market,. Korea's Ministry of Strategy
and Finance,. together with the Financial Services Commission and the Ministry of Land,
Infrastructure and Transport,. have come up with the joint measures.
"The recent hikes in jeonse price are attributed to depressed housing sales,. and structural
changes in the Korean housing market from jeonse to monthly rent. Responding to the
current problems,. the government aims to stabilize rent and jeonse prices,. through
a set of comprehensive financial measures. The government will do its best to protect
the nation's lower-income earners."
According to the plan,. the government will first reduce the home acquisition tax to one
percent of the price of homes that are valued at less than 530-thousand U.S. dollars,. and
to three percent,. of the price of homes that are valued at 800-thousand dollars or more.
Potential homebuyers in the lower-income bracket will be able to secure mortgages at a cheaper
rate in the 1 percent interest range. Given that current inflation rate stands in
the 3 percent range,. this is actually negative interest for homebuyers.
The government will also work toward supplying about 23-thousand public rental housing units
during the latter half of this year,. and offer more tax benefits for monthly renters,.
to lessen the financial burden on people switching from jeonse to monthly rent systems.
The measures come nine days,. after President Park Geun-hye asked related ministries to
come up with ways to stabilize the nation's housing market.
Park Ji-won, Arirang News.