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22 Oct, 2020 10:56

Schadenfreude: South Korean finance minister loses rented accommodation due to his own housing policy

Schadenfreude: South Korean finance minister loses rented accommodation due to his own housing policy

South Korea’s economy and finance minister has been evicted from his property as landlords react to new rules he helped to enact by rapidly replacing tenants so they can increase rents and deposits.

Hong Nam-Ki, who has served in politics for decades, is now left looking for a new home because his landlord is set to move into his accommodation when his lease ends in January. He is facing further trouble because the average deposit in the area where he lives has increased by a third since his rules came into effect back in July.

To combat the buy-to-rent demand in the country, Hong orchestrated the Housing Lease Protection Act, which restricts increases of “jeonse” deposits at 5 percent and allows tenants to extend two-year contracts for another two years, unless the landlord moves themselves into the property. Korea’s jeonse system involves a rent-free lease, with tenants paying landlords a returnable lump-sum deposit to live in a property for several years.

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Hong is seen as being one of the politicians behind the country’s failure to curb the increasing cost of living and rising property prices. Apartment prices in Seoul have risen by over 40 percent in the past two years, as President Moon Jae-in desperately works to try and bring the country’s housing market back under control.

In January, Moon pledged to act “endlessly” to calm the housing market with limits on mortgage lenders and measures to prevent people from hoarding numerous properties. 

Social media users have been gloating about Hong’s situation on real estate forums, saying “let him suffer” and “make him feel what the government has done,” as they accuse him of being a victim of his own policies.

Hong has a net worth of 1.06 billion won ($935,044) as of the end of December 2019, according to government data. As well as serving as finance minister and deputy prime minister, he is the landlord of two properties. However, he can’t move into either of those, as one is under construction and the other is occupied by a tenant who has used the new rules to extend their lease.

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