SEOUL, KOREA - As the "jeonse" prices keep rising, the ratio of jeonse deposits to outright selling prices for apartment homes has hit a historic-high level. Kookmin Bank said this on November 20 on its housing price information page (nland.kbstar.com) while announcing the November apartment price listing.
Jeonse deposit is a uniquely Korean house rental scheme by which the renter makes a lump-sum deposit on a rental space. The deposit's principal is returned to the tenant after the lease is expired without interest.
The ratio of jeonse to selling price for all apartment houses across the country was 69.6 percent in November, up 0.2 percentage point from the previous month. In the Seoul area alone, the ratio was 65.2 percent, up 0.3 percentage point from October. The figure for the whole country is the highest level since December 1998 when Kookmin Bank started compiling the data. By region, the ratios were higher for North Jeolla Province (75.3%), South Chungcheong Province (74.8%), Gangwon Province (73.2%), and Gyeonggi Province (68.5%).
For this year to date, the jeonse prices for the whole country and Seoul have incresed by 3.98 percent and 4.42 percent, respectively. A Kookmin Bank official said, "The rising trend is slowing gradually but it is still steeper than that for selling prices. That's largely because of uncertainties about whether home prices would keep rising and the ease of taking out jeonse loans with the banks."
Article provided by The Korea Economic Daily
