Half of South Korea’s households leased homes through “jeonse” or monthly rental system, and the average jeonse deposit surpassed 100 million won ($89,554) for the first time

August 27, 2013 Leave a comment

Average ‘jeonse’ deposit exceeds $90,000 for first time

2013.08.27 11:26:01

Half of South Korea’s households leased homes through “jeonse” or monthly rental system, and the average jeonse deposit surpassed 100 million won ($89,554) for the first time. Jeonse is a lease system in which a tenant pays a large lump-sum deposit for typically a two-year rental period. Four out of 10 jeonse tenants deposited 100 million won or more to lease homes, with half of jeonse tenants finding it difficult to afford an over five percent increase in deposit. To address the problem, the financial regulator is pondering curbing big jeonse loans and instead increasing jeonse or monthly rental loans for the underprivileged. The numbers are a result of a survey of 5,000 heads of households aged between 20 and 59 conducted and released by the Korea Housing-Finance Corporation Tuesday. Of the polled, 49.6 percent lived in their own housing last year, down one percentage point from 50.6 percent of 2011. This is a steep decline from 63.6 percent of 2007. In contrast, households living in homes rented on a jeonse basis accounted for 25.4 percent of respondents, and those on a monthly payment basis 13.2 percent. Semi-jeonse, a lease system in which jeonse deposit is lowered in exchange for monthly payment, was rare as lately as 2011. But 4.4 percent of respondents were renting housing on a semi-jeonse basis last year, indicating a shift away from jeonse to monthly payment lease. The median jeonse deposit came to 101.8 million won last year, above the 100 million won mark, and surged more than 10 million won from 90.4 million won of 2011. The average jeonse deposit stood at 75.2 million won in 2010.

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