South Korean Government’s ‘New Stay’ Housing Project Offers 8-Year Leases With Rent Hike Cap
The government of South Korea has created a "New Stay" housing project, which allows a resident to lease for up to eight years with less than five percent of rent increase annually. This will greatly benefit those who are currently renting homes and are experiencing increase in rental rates.
Korea JoongAng Daily reported on Wednesday a survey was conducted by the Ministry of Land, Infrastructure and Transport involving 2,500 people from ages 30 to 50 and showed that 28.2 percent of the respondents are area of the "New Stay" housing project and most of them are willing to avail of the offer.
36 percent of the respondents also considered the eight-year lease as the most exciting feature of the housing project, while 16.3 percent were more excited about the rent increase cap. 47 percent of respondents who are currently renting houses are accepting the project positively, and 45 percent of respondents who are currently renting are willing to move into the "New Stay" housing project.
Yonhap News Agency reported on Sept. 17 South Korean President Park Guen Hye promised to produce 60,000 apartments for rent by 2017. "It is the beginning," said Park during a groundbreaking ceremony for an apartment complex in Incheon, which will have over 2,100 apartments set to be finished by 2018.
Based on the data collected by Kookmin Bank, the average lump-sum deposit (called jeonse) in Seoul is now over 350 million won, as compared to New Stay apartments' 550,000 won.
"When New Stay units increase and become a new alternative to rental houses, they will offer a crucial opportunity to change the concept of a house from 'a place to possess' to 'a place to reside,'" said Park. "The government will supply 18,000 New Stay units this year and more than 60,000 units by 2017."
"For the housing welfare of citizens who do not own their own homes, the government has been implementing a customized housing allowance system, beginning in July of this year, to support households that cannot afford rental housing fees," Park added. "We will continue to expand the benefits of the system in the future."