10,000 'Two-Plus-Two' Jeonse Leases Expire as Landlords Move to Reclaim Homes

* Editor's note: AI PRISM (Personalized Report & Insight Summarizing Media) is an artificial intelligence-based personalized news recommendation and summary service developed with support from the Korea Press Foundation. It selects and provides six customized news items by reader type.

1. Ahead of 10,000 'Two-Plus-Two' Jeonse Expirations, Landlords Say: 'I'll Live Here, Please Move Out'

Key summary: With the 2020 enactment of the two tenant-protection laws, 10,347 "two-plus-two" jeonse contracts signed using renewal rights will reach maturity in sequence from this month through the end of the year. Since the announcement of the tax reform plan, 40-50% of rental units maturing in September and October in the Songpa-gu Helio City area have indicated intentions to switch to owner-occupancy. With 2,551 units (24.7% of Seoul's total) concentrated in the three Gangnam districts alone, concerns over falling jeonse listings and a sudden spike in deposits are compounding. Combining new two-year contracts and renewal contracts, the total lease volume facing possible relocation by year-end reaches 94,296 units.

2. Seoul New Presale Prices Jump 400 Million Won in Five Months, 59-Square-Meter Units Reach 1.8 Billion

Key summary: Summit Clavion in Yeongdeungpo-gu and Chungjeongno-yeok Xi-Rene in Seodaemun-gu, which begin first-priority applications on the 18th, each set top presale prices for 59-square-meter units in the high 1.8 billion won range. Summit Clavion is about 400 million won more expensive than the same unit type at a nearby complex five months earlier, while Chungjeongno-yeok Xi-Rene is more than 100 million won more expensive for 59-square-meter units than Gongdeok-yeok Xi-Rene four months earlier. Rising land prices, which increase the cost of the land component, and a sharp rise in construction costs are cited as the background. At complexes not subject to the price cap on new homes, increases in construction costs are passed on directly to presale prices. Earlier, The Sharp Singil Central City closed with an average competition ratio of 31.9 to 1 and Gongdeok-yeok Xi-Rene at 79.99 to 1. Full sellouts are continuing despite high presale prices.

3. Bank of Korea Deputy Governor Ryoo Sang-dai: 'Further Rate Hike Barring Exceptional Shock'

Key summary: Ryoo Sang-dai, the Bank of Korea deputy governor who completes his term on the 20th, said at a press briefing that there will be a further rate hike, and that its timing and pace will be decided based on the data. He cited daily customs-based exports, credit card spending and the central bank's economic outlook as key variables for the August Monetary Policy Board's judgment. In particular, he said core inflation could continue rising for a considerable period on demand pressure from the economic recovery. He noted that although the won-dollar exchange rate has fallen to the low 1,400 won range, it remains high and is a factor pushing prices upward. Investors need to monitor closely the possibility of further increases in mortgage rates.

4. Same Homes Vacated, but Dispute Over Residency-Period Tax Benefits

Key summary: Under the tax reform plan, redevelopment and reconstruction projects were granted recognition of 50% of the construction period as a residency period. However, residents relocated through negotiated purchase or expropriation under public housing projects, and residents of remodeling projects, were excluded from the same benefit. As a result, disputes over fairness are growing. The Seoripul District 1 Saejeongi Village residents' committee submitted an opinion paper to the LH. Experts stress that public housing projects also need residency-period recognition at the same level as private redevelopment projects. The government is leaving open the possibility of supplementary measures in the process of preparing the enforcement decree and enforcement rules.

5. Opposition: 'Property Tax Ultimately Burdens Tenants'; Ruling Party Slams Seoul Mayor's Fast-Track Planning

Key summary: At a full session of the National Assembly's Land, Infrastructure and Transport Committee on the 11th, the ruling and opposition parties clashed head-on over the tax reform plan and the housing supply shortage. The People Power Party argued that an increased property tax burden on non-resident single-home owners would prompt landlords to switch to owner-occupancy, leading to reduced rental supply and rents being passed on. The Democratic Party questioned the effectiveness of the fast-track integrated planning program, saying that apartment construction starts in Seoul during Mayor Oh Se-hoon's four-year tenure amounted to just 58% of the average over the previous decade. The Democratic Party held the first meeting of its housing market stabilization task force on the 12th and is pushing to pass supply-related bills at a party caucus and plenary session on the 13th.

6. Life Insurers' Policy Loans Rise 2 Trillion Won in Half a Year to 42 Trillion

Key summary: The balance of insurance-policy loans at five major life insurers stood at 42.37 trillion won at the end of July, up 2.36 trillion won over the six months from the end of January and rising for a third straight month. As banks successively reduced their lending limits, demand grew to cover home-purchase balance payments or living-expense shortfalls through insurance-policy loans, which are excluded from debt-service-ratio regulations. Even though life insurers lowered their lending limit from 95% to 85% of the surrender value in April, the upward trend in the balance has not broken. The flow of households shifting their real estate financing outside the formal financial system is becoming pronounced.