September 18, 2018 13:21
The market for homes rented on a jeonse or Korean-style deposit lease basis is also heating up in Seoul after apartment prices soared.
Jeonse prices are rising two to three times over the peak moving season at about this time of the year compared to a year or two ago.
According to KB Kookmin Bank on Monday, jeonse prices have risen 0.57 percent in the past month in Seoul, compared to 0.19 percent in September 2016 and 0.16 percent in September 2017.
"Jeonse prices in Seoul stabilized in the past two years but have abruptly begun rising recently, which is worth worrying about," Park Won-kap of KB Kookmin Bank said.
The weekly increase rate had not gone above zero percent in the capital until late June as interest rates are so low that ordinary monthly rent is increasingly taking the place of jeonse leases. But they rose 0.16 percent a week for the first two weeks in September.
The fundamental cause is a shortage of apartments, along with signals that restrictions on renovating old apartments in the metropolitan area, which were supposed to rein in housing prices, are about to be relaxed.
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