Number of jeonse leases with deposits over W1b rises fivefold

Seoul apartments that cost more than 1 billion won ($910,000) in jeonse deposits, or lump-sum rentals, jumped fivefold in the past five years, a South Korean realtor said Tuesday.

Rent deposits of about 11,432 apartments among 1.2 million jeonse leases in Seoul surpassed 1 billion won, an increase of 479 percent from 2,385 apartments in 2009, according to data released by Real Estate Serve.

Apartments in Seoul’s posh Gangnam district accounted for most of them at 54 percent, followed by Seocho district at 37 percent, Yongsan at 2 percent and Yangcheon at 1 percent, data showed.

“It is likely that more jeonse leases will surpass the 10 billion mark once reconstruction projects in Gangnam’s Gaepo, Apgujeong and Banpo are built,” said Real Estate Serve senior researcher Kim Mi-sun.

South Korea has been reeling from skyrocketing jeonse deposit prices, which have risen for 23 consecutive weeks.

Experts said landlords are increasing jeonse prices to get a decent return on their investments, amid low bank interest rates and property values.

(monicasuk@heraldcorp.com)