70% of Citizens Say "Jeonse Deposit Guarantee Helps Youth Housing More Than Monthly Rent"

KJHFC Releases '2020 Housing Finance and Bogeumjari Loan Survey'
42.7% of Youth Prefer Jeonse Loans for "Asset Formation and Cost Savings"
6 out of 10 Respondents Say "One Household, One House Needed for Actual Residence"

Response Status of Housing Finance Guarantee Products Useful for the Youth Sector. Photo by Korea Housing Finance Corporation

[Asia Economy Reporter Song Seung-seop] Seven out of ten Koreans believe that guaranteeing jeonse (long-term lease) funds rather than monthly rent funds helps stabilize youth housing. Additionally, about 60% think that owning one home per household is necessary for actual residence.

According to the "2020 Housing Finance and Bogeumjari Loan Survey" released on the 26th by the Korea Housing Finance Corporation, 73.2% of general households responded that youth jeonse fund guarantees among housing finance guarantee products are more useful for youth housing stability than monthly rent fund guarantees.

Among them, 42.7% answered that using a jeonse contract rather than a monthly rent contract is advantageous for asset formation and cost reduction. 24.3% cited that the interest on jeonse loans is cheaper than monthly rent and monthly rent loan interest costs as the reason.

This survey is conducted annually by the Housing Finance Corporation to understand consumer awareness and demands regarding housing finance. It investigates housing finance usage status, intention to purchase housing, intention to use housing finance, and usage status of Bogeumjari loans and Didimdol loans. The general households sample consisted of 5,000 households nationwide with household heads or spouses aged 20 or older.

Perception of the necessity of homeownership by household head age and housing ownership status. Photo by Korea Housing Finance Corporation

Households that answered that one home per household for actual residence is absolutely necessary accounted for 61.4% of the total. Households that would use housing in rental forms such as jeonse or monthly rent if the residential environment is stable accounted for 18.5%, and those who believed it necessary to own housing for investment purposes accounted for 11.2%.

However, households that responded they intend to purchase a home in the future accounted for 30.1% of the total, down 2.2 percentage points from the previous year. By age group of household heads, households aged 30 or younger showed the highest purchase intention (56.5%). Among non-homeowner households, 52.9% answered they would buy a home in the future.

Also, general households preferring variable-rate mortgage loans showed a strong tendency to switch if the difference with fixed rates narrows to within 0.75 percentage points.

Separately surveying about 2,000 households that used Bogeumjari loans within one year, 80.7% responded that they are satisfied with the corporation’s products. This is an increase of 3.3 percentage points compared to the same period last year. The most common reason for satisfaction was "trustworthy because it is a public institution product" at 80.9%. This was followed by "loan usage is possible for up to 30 years" (73.3%) and "interest burden does not increase even if market interest rates rise" (73.1%).

This content was produced with the assistance of AI translation services.