The jeonse price soared two years ago… Visualization of the aftermath of the reverse tax crisis
Won Hee-ryong mentioned deposit return loan… “Discussion with financial authorities”
Concerns over additional loan insolvency controversy over landlord’s moral hazard
Voices of concern are growing as forecasts are emerging that the reverse tax crisis will spread rapidly in the second half of this year. It is a concern that the number of accidents in which the landlord cannot return the deposit may increase significantly due to the sharp rise in the rental price two years ago.

Accordingly, the government is considering expanding deposit return loans so that landlords can return deposits to tenants. Experts also agree that lending regulations need to be relaxed to some extent to prevent damage to tenants.

However, there are voices concerned about side effects, such as causing moral hazard or insolvency of additional loans, if the state steps in and helps in crises. It is pointed out that the criteria for support need to be strict.

Jeonse deposit return accident and HUG subrogation trends. /graphics=bizwatch.
In fear of reversal… Government reviewing easing of deposit return loans

Government-related ministries such as the Ministry of Land, Infrastructure and Transport and the Financial Services Commission are reviewing ways to ease regulations on deposit refund loans as one of the countermeasures against the reverse jeonse crisis.

Minister of Land, Infrastructure and Transport Won Hee-ryong said at a press conference on the 17th, “There is a consensus with the financial authorities that if the jeonse deposit is not returned due to a decrease in the rental price, we will give a loan (return of the deposit) in a situation where other loans cannot be attracted.”

This is interpreted as a countermeasure against the rapid increase in accidents in which landlords are unable to return the existing jeonse deposit due to the recent drop in jeonse prices.

In fact, according to the Housing and Urban Guarantee Corporation ( HUG ), the number of accidents that do not return the jeonse deposit has been increasing rapidly since last year. Until the first half of last year, the amount of unreturned accidents was only 60 billion won per month, but in the second half it rose to 100 billion won, and in March of this year, it exceeded 300 billion won, the highest ever. ▶Related article: [Jip-Isshu] The rent that has been paid has already reached 1 trillion won… What to do with ‘turning to deficit’ HUG (May 18)

The problem is that this trend is highly likely to accelerate in the future. This is due to the fact that as house prices skyrocketed two years ago, the jeonse price also soared. Since then, the jeonse price has fallen significantly, but it is pointed out that from the second half of this year, there is a high possibility that the number of cases in which the deposit cannot be returned will increase rapidly as these contracts expire.

The government is still supporting loans for the purpose of refunding the deposit through the Special Bogeumjari Loan. However, some point out that the effect of the policy is bound to be limited because it cannot be used by multi-homed people.

Average jeonse price trend of general housing in 2021-2022. /graphics=bizwatch.
Concerns about moral hazard and loan insolvency

Experts are unanimous in saying that some deregulation is necessary in that damage to tenants can spread greatly and become a social problem.

However, there may be a moral hazard controversy, and there are voices concerned about side effects, such as an increase in the possibility of damage to the next tenant if the landlord’s loan increases. It is pointed out that the target of support or loan limit standards should be strict, and the timing of support should be limited.

Koh Jong-wan, head of the Korea Institute of Wealth Management, explained, “Recently, there are an increasing number of damage cases where deposits are not returned, and there is a high possibility that such disputes will spread, so it is necessary to release loans even temporarily.”

However, he pointed out that “when the jeonse price rises, the landlords benefit, and when it goes down, the state steps in to help, so there may be a moral hazard controversy.”

There are also concerns that the deposit return loan could further confuse the jeonse market. Accordingly, it is pointed out that more fundamental measures are needed.

Seo Jin-hyung, co-representative of the Fair Housing Forum ( Professor of MD Product Planning and Business Department, Kyungin Women’s University), said메이저사이트, “If the landlord takes out an additional loan using the house as collateral, it may be more difficult for the new tenant to get the deposit back later.” “There is a risk that loans may become insolvent, so measures such as limiting the amount of loans are needed,” he stressed.

In the long run, some point out that it is necessary to reduce the size of jeonse loans. It is pointed out that the sudden rise in the jeonse price due to the indiscriminate activation of the jeonse loan caused the reverse jeonse crisis, so it should be blocked in advance.

Song Seung-hyeon, CEO of City and Economy, pointed out, “The excessive supply of liquidity through charter loans to the rental market has resulted in a larger amount that landlords have to return.” .

He advised, “Since there is inevitably a risk when additional loans are given to landlords who are unable to repay, supplementary measures are also needed, such as making it clear to new tenants whether or not the landlord will provide additional loans in the future.”

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