The monthly rent for a 300-million-won apartment is expected to be around 250,000 won. (image: KobizMedia/ Korea Bizwire)
SEOUL, May 30 (Korea Bizwire) – The Ministry of Land, Infrastructures and Transport (MOLIT) revealed Sunday that it plans to implement a policy called ‘lease and purchase REITs (Real Estate Investment Trusts) for newlyweds’, starting in September. But it’s also evaluating the possibility pushing the start date forward, before the beginning of autumn, which is a major moving season in Korea.
The ‘lease and purchase REITs for newlyweds’ plan is part of the ministry’s policy to relieve the burden of unaffordable real estate by offering a greater variety of housing options to young couples.
This particular pilot enterprise will offer 1,000 rental units, 70 percent of which the ministry plans to distribute to newlyweds.
The REITs, established by the ministry’s City Housing Funds (CHF), will purchase the apartments with loans and investments from the CHF, which are ultimately consigned to the Korea Land and Housing Corporation for distribution.
For instance, if REITs purchase a 300-million-won apartment, they will receive half of the purchase amount from the newlyweds, and the other half through both loans (120 million) and investment (30 million) from the CHF.
Newlyweds will be offered a maximum of 10 years of rental housing, during which the monthly rent is expected to remain unchanged as the ministry plans not to raise both the interest rate and dividends that the CHF receives.
The monthly rent for a 300-million-won apartment is expected to be around 250,000 won.
By Lina Jang (linajang@koreabizwire.com)
