The government has laid out a plan to supply 90,000 purchased rental dwellings in the Seoul metropolitan area by 2027 to stabilize the jeonse and monthly rent market, but questions are being raised about whether the target is achievable as this year's purchase performance remains at about 10% of the goal.
According to the Ministry of Land, Infrastructure and Transport and others on the 31st, the Korea Land & Housing Corporation (LH) signed commitments for a total of 3,217 purchased rental dwellings in the Seoul metropolitan area from January to April this year, including 2,678 newly built units and 539 existing units. This amounts to 10.4% of this year's purchase target of 31,014 units in the metropolitan area.
Purchased rental dwellings are a type of public rental in which the public sector buys existing or newly built dwellings and leases them at prices below market rates. The government is pushing to expand supply to stabilize the jeonse and monthly rent market and support vulnerable housing groups.
Following the dwelling supply measures released last year, the government recently reaffirmed its policy to supply 90,000 purchased rental dwellings in the Seoul metropolitan area by 2027 and to concentrate more than 66,000 of them in Seoul and regulated areas of the metropolitan area.
However, the industry sees it as unlikely to meet the target at the current pace. In particular, for newly built purchased rentals, rising land acquisition and construction costs are weighing on the market, and analysts say developer participation is falling short of expectations.
On top of this, the fact that a significant portion of the purchased rental volume is concentrated in non-apartment types such as villas, multi-family dwellings, and officetels is also cited as a limitation. With the prolonged slump in the non-apartment market compounded by construction cost burdens, there are constraints on expanding supply.
Experts say that, in addition to expanding supply, measures on the demand side—such as supporting end users of non-apartment housing and revitalizing private rentals—also need to be prepared.