President Park Geun-hye vowed Thursday to provide more than 60,000 apartments for rent by 2017, the latest in a series of South Korea's efforts to help stabilize the availability of residences.



Park called it the "New Stay" project, which could change the paradigm of the country's housing culture.



"It is the beginning," Park said in a groundbreaking ceremony for an apartment complex that will have more than 2,100 apartments in Incheon, a port city just west of Seoul. The units are set to be completed by 2018.



She said the new rental apartments could help stabilize the country's housing market, citing that tenants can stay up to eight years and annual rent hikes are capped at a maximum of five percent.



Her comments came amid a change in the local housing market due mainly to the low interest rate. South Korea's central bank has left its benchmark policy rate unchanged at a record low of 1.5 percent for September.



More and more people are paying monthly rent for their accommodations in recent years, a departure from South Korea's decades-old unique home rental system known as jeonse.



Under the jeonse system, tenants pay a lump-sum deposit, known as key money, to the landlord which is then returned at the end of the rental agreement, which usually lasts two years. Also, during the lease period, the tenants do not pay monthly rent.



The average key money for more than half of the apartments in Seoul has surpassed 350 million won ($299,000), according to data compiled by Kookmin Bank, a flagship unit of South Korea's leading banking giant KB Financial Group Inc.



In comparison, the key money and monthly rent of an 84-square-meter New Stay apartment is 65 million won and 550,000 won, respectively. (Yonhap)