The government plans to encourage insurance companies to participate in the rental market as part of its broader strategy to increase housing supply, aiming to involve larger private sector companies in this effort.
The residential rental market has been accessible to private businesses, alongside state-run housing developers.
According to the Ministry of Land, Infrastructure, and Transport, the private sector accounts for 80 percent of the rental home market, while the public sector constitutes the remaining 20 percent.
However, the market is predominantly made up of individuals and small firms. Tight regulations have made it challenging to turn a profit, leading larger firms to show little interest in operating rental properties.
Under the circumstances, the land ministry announced, Wednesday, a set of measures that offer benefits to corporations that enter the home rental market.
Insurance firms, along with housing developers and real estate investment trusts (REITs), were among the corporations from different industries that the ministry encouraged to join.
“We deem insurers can capitalize on their know-how and expertise in dealing with long-term products to rent homes and make profits,” the ministry 카지노 said.
The benefits will be offered to those that rent more than 100 homes in a single residential complex for 20 years or longer.
The period for home rentals will be extended beyond the current 10 years. In return, the businesses involved will benefit from eased regulations, according to the ministry.
For instance, the ministry announced that it will eliminate the 5 percent cap on rental price increases. Additionally, it will remove the rule that prevents rental price hikes from exceeding the inflation rate in areas where rental homes are located.
The rental price could not exceed 3 percent in Seoul if the city’s inflation rate was at 3 percent.
“We believe the new measure can contribute to an efficient supply of homes,” the ministry said, adding it will “work closely with the relevant ministries plus the National Assembly for the plan to take effect promptly.”