The 'Jeonse price ratio' in some areas of Gyeonggi-do has risen significantly, raising concerns about tenant damages such as "empty Jeonse" cases.
The Jeonse price ratio is the ratio of the Jeonse price to the housing sale price. An increase in the Jeonse price ratio means that the difference between the housing sale price and the Jeonse price disappears, which can lead to side effects such as the proliferation of empty Jeonse cases due to price reversals. An empty Jeonse refers to a house where the sale price has fallen or the Jeonse price ratio is excessively high, causing the landlord to be unable to return the Jeonse deposit.
Based on actual transaction data for sales and Jeonse from the Korea Real Estate Board, Gyeonggi-do analyzed the Jeonse price ratios for apartments and multi-family housing over the past three months as of April. The overall apartment Jeonse price ratio in the province slightly increased from an average of 65.2% over the past year to 67.2% in the recent three months. In contrast, the Jeonse price ratio for multi-family housing decreased slightly from 72.3% over the past year to 68.9% in the recent three months.
The problem is that in some areas within the province, the Jeonse price ratios for apartments and multi-family housing have risen sharply.
For apartments, some areas such as Icheon-si recorded 83.1% (79.9% over the past year) and Yeoju-si 82.1% (76.8% over the past year), exceeding 80%. For multi-family housing, Anseong-si recorded 93.9% (74.6% over the past year), Suji-gu in Yongin-si 92.2% (86.9% over the past year), Manan-gu in Anyang-si 82.1% (80.6% over the past year), and Cheoin-gu in Yongin-si 80.7% (77.9% over the past year).
When the Jeonse price ratio exceeds 80%, it can lead to serious problems where tenants cannot recover their Jeonse deposits. Especially if tenants take out loans secured by the Jeonse deposit, the burden of loan repayment can further increase their financial difficulties.
Accordingly, Gyeonggi-do urged active use of the Gyeonggi Real Estate Portal (https://gris.gg.go.kr) to prevent damages caused by empty Jeonse cases.
By using the portal, when signing a Jeonse or purchase contract, users can check the surrounding market prices of the property of interest or view integrated actual transaction prices by complex and area in advance. This allows for prior understanding of appropriate transaction prices, and the brokerage fee calculation function enables users to check fees beforehand.
Also, tenants who want to check for empty Jeonse cases can enter the "Check Empty Jeonse" section, select via map or search by address, and view the 'recent transaction information (Jeonse/sale information)' for the searched area.
Gyeonggi-do is also preparing various measures to support and prevent Jeonse-related damages.
Since March last year, the 'Jeonse Damage Support Center' has been established to provide ▲ reception and investigation of Jeonse fraud damages ▲ financial and legal counseling ▲ emergency living expense support ▲ emergency housing relocation support. Additionally, they have published guides on support contents by damage type, casebooks of damages, house-hunting checklists, and guides exclusively for foreigners to strengthen damage support.
Furthermore, to prevent Jeonse damages, they are proposing legal amendments, providing relief and support for victims, protecting tenants' rights, and jointly promoting the 'Jeonse Damage Prevention Project' with city/county offices and real estate agent associations.
Lee Gye-sam, Director of the Gyeonggi-do Urban Housing Office, said, "Gyeonggi-do is making multifaceted efforts at the government-wide level including legislative, judicial, and administrative measures to support and prevent Jeonse damages." He added, "When the Jeonse price ratio rises, tenants should carefully check housing market prices and Jeonse price ratios before signing contracts. It is also important to subscribe to Jeonse deposit insurance."
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