[2025 Audit] Policy Funds Fuel Jeonse Price Surge... Deposit Share Surpasses 20%

Analysis of Data from Assemblyman An Taejun’s Office, National Assembly Research Service, and HUG

The proportion of policy funds within jeonse (long-term rental deposit) loans has surpassed 20% for the first time. The growth rate of policy funds is outpacing the overall increase in total deposits. This indicates that the government has played a direct and indirect role in fueling the rapid rise of household debt.

According to an analysis by Assemblyman An Taejun of the Democratic Party, who obtained and reviewed relevant data from the National Assembly’s Land, Infrastructure and Transport Committee, policy finance products such as the Bogeumjari Jeonse Loan and deposit return guarantees nearly doubled from 101.6 trillion won in 2020 to 196.2 trillion won in 2023. In comparison, the total scale of jeonse deposits is estimated to have increased by about 39%, from 593.8 trillion won to 824 trillion won during the same period, highlighting that the release of policy funds into the market has been much faster.

Assemblyman An’s office based its analysis on estimates of jeonse deposits provided by the National Assembly Research Service, and data on policy funds submitted by the Housing and Urban Guarantee Corporation (HUG) and the Korea Housing Finance Corporation, which handle related financial products. The National Assembly Research Service estimated the size of jeonse and deposit-based monthly rent deposits using the Ministry of Land, Infrastructure and Transport’s housing survey results.

Jeonse deposits have been rising rapidly since 2020. In 2021, the total reached 765 trillion won, an increase of more than 170 trillion won in just one year. The figure climbed to 785 trillion won in the following year and 824 trillion won in 2023. Policy finance grew even faster. The share of policy funds within jeonse deposits was 17.1% in 2020 and slightly decreased to 16.4% the following year, but then surged to 19.5% in 2022 and 23.8% in 2023.

There have been persistent concerns that the large-scale release of policy funds into the market has contributed to rising housing prices. As jeonse prices increased, commercial banks also expanded their jeonse loan offerings. Since jeonse loans are widely perceived as products for ordinary citizens, the government has continuously increased related budgets. However, some have pointed out that the surge in jeonse loans has led to more frequent so-called “gap investment,” where buyers purchase homes while taking over existing jeonse contracts.

On the 13th, the reconstruction maintenance plan amendment was approved, accelerating the reconstruction maintenance project at Eunma Apartment in Gangnam-gu, Seoul. 2025.10.13 Photo by Kang Jin-hyung

Given that the scale of policy finance has continued to grow even after 2023, Assemblyman An’s office assessed that the proportion of policy finance is still on the rise. Assemblyman An Taejun stated, “Since the numbers now confirm that the rising share of policy finance may be affecting housing prices, the government needs to take preemptive measures to address the sharp increase in policy finance that could stimulate further price hikes.”