South Korean Minister of Finance Hong Nam-ki, the architect of rules aimed at protecting tenants and slowing deposit increases, has himself been forced to look for a new home as landlords react to the rules by quickly replacing tenants so they can bump up deposits.
Hong is also faced with broadening his search, as the average deposit where he lives 20 minutes from parliament has soared by one-third since his housing rules took effect in July, with the irony of his predicament setting the Internet alight.
“Worse comes to worst, he can camp by the Presidential Blue House, right?” one user wrote on a real-estate forum.
Seoul apartment prices have risen more than 50 percent since South Korean President Moon Jae-in inherited loosened mortgage rules from the previous administration three years ago.
To slow buy-to-rent demand, the Housing Lease Protection Act, led by Hong, capped increases of jeonse deposits at 5 percent and allowed tenants to extend standard two-year contracts for another two, unless landlords themselves move into the property.
Jeonse is a lump-sum returnable deposit paid instead of monthly rent.
The act led to an unprecedented shortage of jeonse housing nationwide as landlords sought to empty properties ahead of July so they could increase deposits for new tenants, expecting not to be able to raise them again for four years.
In Hong’s case, his lease ends in January, at which time his landlord is set to move into the property, said a realtor citing an industry database, echoing local media reports.
“My fellow landlords, let’s not rent out to Hong, let him suffer!” wrote a landlord on the popular real-estate forum. “Let’s make him feel what the government has done!”
For a comparable apartment with three bedrooms in Hong’s complex in Seoul’s up-market Mapo area, he faces deposits that have surged 32 percent in three months to 830 million won (US$731,310), Naver Real Estate data showed.
Hong, who has served the government for more than 30 years, had a net worth of 1.06 billion won at the end of December last year, government data showed.
Hong is one of a group of senior officials popularly blamed for failing to curb runaway home prices in Asia’s fourth-largest economy, even after more than 20 rounds of mortgage curbs and other steps during Moon’s tenure.
In that time, median Seoul apartment prices have risen more than 50 percent, KB Bank data showed.
His forced move opened a geyser of schadenfreude, with South Koreans struggling to find affordable housing mocking Hong for being a victim of his own making.
“Dear Hong, come and live in my place. I’ll give you a good deal,” one netizen said.
“Hong’s so smart. Way to go bro. Keep playing the victim and demand a bigger job from Moon,” another wrote.
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