Following the implementation of the Lease Protection Act 2 (right to request contract renewal and rent ceiling system), the price of jeonse (long-term lease deposit) has skyrocketed, and new types of jeonse fraud have become rampant, deepening housing insecurity.
According to monthly time series data from KB Real Estate on the 7th, as of May, the average jeonse price for apartments in the Seoul metropolitan area was 469.2 million KRW, an increase of 154.71 million KRW (49.19%) compared to 314.49 million KRW in the same month of 2019. Narrowing the scope to Seoul, the price rose from 462.41 million KRW to 677.92 million KRW, an increase of over 200 million KRW.
Due to the rise in jeonse prices, those with relatively limited capital, such as young adults starting their careers and newlyweds, are being pushed out of Seoul. According to resident registration statistics, the registered population of Seoul fell below the 9.5 million mark to 9,496,887 as of May. Migration to Gyeonggi and Incheon, where housing prices are cheaper than in Seoul, has increased. From the beginning of this year to May, the net migration from Seoul to Gyeonggi was 22,626 people, and to Incheon, 3,885 people.
Behind the tearful exodus from Seoul lies a trail of bloodshed caused by jeonse fraud. The surge in jeonse prices tends to cause a "housing downgrade," moving from apartments to villas, and from mid-priced villas to lower-priced villas. Villa neighborhoods, which are more accessible to young adults and subject to relatively fewer regulations, have become major sites of jeonse fraud.
According to the Housing and Urban Guarantee Corporation (HUG), the amount of jeonse deposit that landlords fail to return to tenants after the expiration of the lease contract has been increasing every year. The amount of jeonse deposit return guarantee claims in the first half of this year was 340.7 billion KRW, similar to the total amount for the entire year of 2019. The amount for the first half of this year alone accounts for 58.8% of last year's total, making it certain that this year will set a record high.
Won Hee-ryong, Minister of Land, Infrastructure and Transport, who was active as the "top lecturer on Daejang-dong" during the presidential election period, stood in front of the blackboard for the first time since his inauguration because the damage caused by jeonse fraud has reached a serious level. On the 5th, Minister Won uploaded a video titled "Countermeasures Against New Types of Jeonse Fraud," about 13 minutes long, on his YouTube channel, Won Hee-ryong TV. He personally scribbled on the blackboard with chalk to introduce new jeonse fraud methods and precautions.
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