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Half of jeonse apartments in Seoul valued at over US$300,000 서울 아파트 전세 절반 이상이

The average lump-sum rental deposit on an
apartment here in Seoul continues to rise at a rapid pace.
And tenants are feeling the squeeze,…. as many of them have to borrow more and more
money to pay their rent every couple of years. Lee Ji-won breaks down some numbers for
us. The median lump-sum deposit,… or jeonse
price, for apartments in Seoul hovers at about 300-thousand U.S. dollars.
That′s up 20-percent compared to a year ago.
Jeonse is a unique rental system where the tenant gives the homeowner a lump sum of money,
which is returned after the lease expires, usually two years.
The affluent Gangnam district in southern Seoul had the highest jeonse prices,…
at a median of 346-thousand dollars,… up more than 20 percent from a year ago.
Prices in the northern half of Seoul saw a hike of 15 percent on-year.
Jeonse prices have been rising fast since 2009.
Jeonse rates now account for about 70 percent of a property′s actual value.
The surge in jeonse prices comes because more homeowners prefer monthly rentals, instead
of two-year contracts,…. due to low interest rates on bank deposits. ″Jeonse prices will continue to rise. Because
despite a drop in supply,… there′s a continued demand. Many people refrain from
paying monthly rates,… so people are likely to pay a larger amount even they know its
as expensive as the house itself.″ And perhaps reflective of the high prices,…
Koreans seem to be borrowing more. According to the Bank of International Settlements,…
the ratio of Korea′s household debt to GDP was the highest among key emerging countries
last year. The country′s household debt accounted for
84 percent of its GDP much higher than the average of 30 percent for 14 emerging economies.
Korea′s figure has added 12 percentage points since 2009,… while emerging economies
saw a rise of 10 percentage points on average over the same period.
Lee Ji-won, Arirang News.

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