On the 19th, the so-called’pre-rental rent prohibition law’, in which the mandatory period of residence is granted to complexes subject to the upper limit on the sale price of private residential land, will come into force. The construction site of Raemian One Bailey, Banpo-dong, Seoul, scheduled for sale in March-April. Hankyung DB
After the 19th, the so-called’pre-rental rent prohibition law’ is enforced, in which a two to three-year mandatory residency period is applied to complexes subject to the upper limit system for pre-sale prices of private residential land, where the announcement of tenant recruitment is announced. This is to prevent the trend of subscriptions for’lottery sales’ which are cheaper than the market price. It is pointed out that even if they win the subscription, they cannot pay the balance by using the jeonse deposit, so it is not only taking the opportunity to subscribe to the common people who do not have enough funds. There is also growing concern that the jeonse crisis may worsen due to the enforcement of the new lease protection law, such as the contract renewal application system in the second half of last year.
5 years public and 3 years private residence
The Ministry of Land, Infrastructure and Transport announced on the 16th that the revised bill of the Enforcement Decree of the Housing Act, which stipulates the mandatory period of residence for housing tenants subject to the pre-sale price limit, has passed the State Council. It is expected to take effect on the 19th after the President’s home.
According to the amendment, a mandatory residence period for private housing is applied for 3 years if the sale price is less than 80% of the sale price of a nearby area, and 2 years for 80-100% of the sale price in the neighborhood. For public housing, less than 80% of the housing sale price in the neighborhood is 5 years, and 80-100% is 3 years. Previously, only apartments built by public institutions such as LH (Korea Land and Housing Corporation) in public housing were given a mandatory period of residence.
If you do not live during this period, you will be imprisoned for up to one year or fined up to 10 million won. Houses that are pre-sale must be sold to LH at pre-sale prices. Exceptions are when there are unavoidable reasons, such as working, living, attending school, or staying abroad for disease treatment.
The pre-sale price ceiling system is a system that calculates the pre-sale price to compensate for the construction company’s appropriate profits in addition to the cost of land and construction when selling a house, and then supplies it below that price. All public housing apartments are subject to the pre-sale price ceiling. Private housing sites are covered in 18 districts and 309 dongs including Songpa and Yeongdeungpo in Seocho, Gangnam, Seoul, and 322 dongs including 3 cities and 13 dongs in Gwangmyeong, Hanam and Gwacheon, Gyeonggi Province.
An official from the Ministry of Land, Infrastructure and Transport predicted that “through the revision of the Enforcement Decree of the Housing Act, speculative demand for houses subject to the pre-sale price ceiling will be cut off and housing will be supplied to end-users.”
Concerns about intensifying cheonsei difficulties due to the cheonsei ban law
In the future, criticism has been raised that only the’cash rich’ can use the subscription system. Until now, there have been many cases in which the winners of subscriptions with insufficient funds pay the balance with the tenant’s jeonse deposit at the time of moving in. It is pointed out that as it becomes impossible to utilize the jeonse deposit, the common people may be alienated from the subscription market.
Banpo-dong Raemianwon Bailey (2990 households), which is about to be sold in pre-sale, is also highly likely to be subject to the jeon and monthly rent ban. If the announcement of recruitment for tenants of this complex, subject to the pre-sale price limit, is released after the 19th, the subscription winner will not be able to release the jeon or monthly rent at the time of move-in. Professor Shim Gyo-eon of Konkuk University’s Department of Real Estate said, “The number of apartments exceeding 900 million won in pre-sale apartments that cannot receive intermediary loans is increasing, and the burden of the winners is increasing. There will be.”
There is also great concern that the jeonse crisis could intensify with the introduction of the new lease protection law. This is because the’placement jeonse’ virtually disappears after about three years due to the enforcement of the jeon/month rent ban. Rent-a-car rental means that the rent for rent in a nearby area drops as the rent for a new apartment is largely released. In the meantime, new apartment charters can be traded at relatively low prices, so the use of young people such as newlyweds has been high. Professor Kwon Dae-jung of the Department of Real Estate at Myongji University said, “There is a possibility that the demand for relocation will increase due to the reconstruction and redevelopment according to the ‘2·4 real estate measures’.
Reporter Jang Hyun-joo [email protected]
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