Loans extended by the nation's five major banks to individuals for home rentals jumped 38.5 percent on-year in February amid the government's tightening of mortgages for new homes, according to industry data Saturday.
Outstanding loans extended by the five lenders, including Kookmin Bank and Shinhan Bank, specifically for home rentals amounted to about 49 trillion won ($46.1 billion) as of the end of last month, up 13.6 trillion won from a year ago, the data showed.
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(Yonhap) |
The rise is apparently tied to a surge in home rental prices.
As of February, the average price of home rentals, called "jeonse" here, reached over 426 million won in Seoul.
Jeonse is a home rental system unique to South Korea under which tenants make a lump sum deposit that is fully returned when the lease expires.
Such a system used to be preferred by both tenants and landlords as it helps homeowners significantly lower their initial cost of purchasing a house and make interest off the large deposit that used to run up to around 60 or 70 percent of the price of their homes. (Yonhap)
