How affordable is housing in South Korea?
By the third quarter of 2022, the Korean housing affordability index (K-HAI) had reached over 89 points. The K-HAI measures the share of income necessary for a median-income family to repay a standard mortgage on a median-priced home, with higher values reflecting a heavier financial burden when purchasing a home. The index in Seoul was almost double that of the next-highest regional index, showing significant polarization between the capital and other provinces. However, with the number of unsold homes having almost doubled in some areas, the price of housing is expected to decline in the future.Cases of jeonse fraud
One aspect of the South Korean housing market that cannot be overlooked is the concept of jeonse. Jeonse is a rental deposit system unique to the country where tenants pay large amounts of money up-front, usually around 70 percent of a property’s value, in exchange for a two-year tenancy with little to no monthly rent. However, a recent string of jeonse fraud cases has led to reports of victims losing the entirety of their assets. In such cases, tenants are robbed of their deposits due to unknown or undisclosed landlord debt, property auctions, or some other kind of fraudulent cause. The social impact of the domestic housing market has been palpable, as several jeonse fraud cases have been connected to victims of suicide in the past year.
