The amount of deposits for jeonse that tenants did not receive back from the landlord stood at 340.7 billion won in the first half of this year alone. This is an all-time high for the first half of the year.
According to the data submitted by the Housing and Urban Guarantee Corporation (HUG) by Rep. Yang Kyung-sook of the Democratic Party of Korea on the 12th, 1595 accidents with guarantees for the return of deposits for deposits occurred from January to the end of June this year, and the amount of accidents was 340.7 billion won.
The Jeonse Deposit Return Guarantee is a product in which guarantee institutions such as the Housing and Urban Guarantee Corporation and Korea Housing Finance Corporation return the Jeonse deposit to the lessee on behalf of the lessor if the lessor does not return the deposit after the jeonse contract.
The amount of deposit refund guarantee accidents is increasing every year from 344.2 billion won in 2019 to 468.2 billion won in 2020 and 579 billion won last year. If the trend is in the first half of this year, it is highly likely that the accident amount will exceed 600 billion won for the first time in history.
By housing type, multi-family housing tenants suffered the most at 11.6 billion won, followed by apartments (0.99 billion won), officetels (41.3 billion won), and row houses (9.3 billion won).
As the real estate market enters the house price adjustment period, concerns about kan jeonse are also spreading, centering on multi-family housing.
Along with such an increase in accidents, interest rates on loans increase due to interest rate hikes, which may lead to an acceleration of monthly rent.
The Seoul apartment jeonse supply and demand index surveyed by the Korea Real Estate Agency in the last week of June fell to 94.3 for the second week in a row. If the Jeonse supply and demand index is lower than 100, it means that there is more supply than demand.
Recently, the demand for jeonse is decreasing as tenants are no longer avoiding monthly rent due to the issue of interest rate hike.
As interest rates rise, a reverse phenomenon has also been observed, in which the interest on the jeonse loan becomes more expensive than the monthly rent. At the end of June, the interest rates on jeonse loans at the four major commercial banks rose to 3.99 to 5.01 percent per annum.
An industry insider said, “Recently, interest rates are being raised one after another, increasing the burden of paying interest on the jeonse loan rather than the monthly rent.”
/ Fortune Korea Correspondent Kim Dong-hyun [email protected]