[2025 Audit] Rental Fraud Damage Spreads to Regional Areas... North Gyeongsang and North Chungcheong Up 4-5 Times

Rental Deposit Guarantee Insurance Claims Surge Last Year
Subrogation Payments by HUG Also Increase
"HUG's Financial Burden Expands... Countermeasures Needed"

The pattern of rental fraud is spreading from the Seoul metropolitan area to regional provinces. As the scope of rental fraud and the financial burden on the Korea Housing and Urban Guarantee Corporation (HUG) are expanding, there are growing calls for countermeasures.

According to data submitted by Jeong Jeomsik, a member of the National Assembly's Land, Infrastructure and Transport Committee from the People Power Party, to HUG on October 23, the number and amount of rental deposit guarantee insurance claims in regional areas have surged.

Jeong Jeomsik, member of the People Power Party. Photo by Jeong Jeomsik's office

Last year, the number of rental deposit guarantee insurance claims in North Gyeongsang Province reached 764 cases, a 5.7-fold increase from the previous year. The number of cases also rose sharply in North Chungcheong Province (180 cases, up 4.4 times) and South Gyeongsang Province (600 cases, up 3.9 times). In terms of the amount involved, North Gyeongsang Province (138.7 billion won) saw a 6.2-fold increase, North Chungcheong Province (32.7 billion won) a 3.9-fold increase, and South Gyeongsang Province (101.8 billion won) a 3.5-fold increase. In contrast, the Seoul metropolitan area, which accounted for about 80% of all rental fraud cases during the same period (16,845 cases), saw a 4.8% decrease.

The number and amount of subrogation payments-where HUG pays rental deposits to tenants-also increased mainly in regional areas. Last year, the subrogation amount in North Gyeongsang Province (96.9 billion won) jumped 5.5 times from the previous year, while North Chungcheong Province (26.8 billion won) and South Gyeongsang Province (69.7 billion won) saw increases of 3.6 times and 3.0 times, respectively.

This trend is believed to be linked to the decline in housing prices in regional areas. Lee Eunhyeong, a research fellow at the Construction Policy Research Institute, explained, "Even though there is residential demand in regional areas, many people choose to rent rather than buy, resulting in a higher rental-to-sale price ratio (jeonse ratio) of 70-80% compared to the metropolitan area, which increases the risk of rental fraud."

Assemblyman Jeong emphasized, "A clear 'second phase' of rental fraud damage is appearing as the problem spreads from the metropolitan area to regional provinces," adding, "We need to move beyond a metropolitan-centered response and establish a differentiated guarantee and recovery management system that reflects regional risks."