Even with Loan Restrictions, Buying Desire Persists... Half of Under-30s Bought Homes Through 'Gap Investment'

Assemblyman Cheon Junho's In-Depth Analysis of One-Year Funding Plan
Average Housing Price for Seoul Buyers 800 Million KRW
Funding Sources Ranked: Real Estate Sale Proceeds ＞ Rental Deposits

[Asia Economy Reporter Kim Hyemin] Over the past 1 year and 4 months, more than half of homebuyers aged 30 and under who purchased houses in Seoul financed their purchases through 'gap investment' involving jeonse deposits. Despite government loan regulations, the rising housing prices have not dampened buying sentiment; rather, buyers appear to have used indirect financing methods.

On the 22nd, Cheon Junho, a member of the National Assembly's Land, Infrastructure and Transport Committee from the Democratic Party of Korea, revealed these findings after analyzing 193,974 funding plans submitted in Seoul from March last year to July this year. Since March 13 last year, the government has required mandatory submission of funding plans for housing purchases over 300 million KRW in speculative overheated districts and regulated areas, and over 600 million KRW in non-regulated areas.

According to Representative Cheon, the average housing price for buyers in Seoul was 799 million KRW, with a total funding amount of approximately 155 trillion KRW. The funding sources were as follows: proceeds from real estate sales at 57 trillion KRW (36%), jeonse deposits at 34 trillion KRW (22%), bank deposits at 23 trillion KRW (15%), mortgage loans at 18 trillion KRW (11%), family loans and other borrowings at 5.4 trillion KRW (3.5%), and gifts/inheritance at 4.9 trillion KRW (3.2%).

Considering the average housing price of 799 million KRW, proceeds from real estate sales accounted for the largest portion at 291 million KRW, followed by jeonse deposits at 175 million KRW, and bank deposits at 116 million KRW. Mortgage loans accounted for only 91 million KRW.

Analysis of funding plans by age group showed that the average housing price for Seoul homebuyers aged 0-39 was 697 million KRW. The largest funding source was jeonse deposits at 192 million KRW (28%), with a jeonse deposit succession rate of 52%. This indicates a higher proportion of gap investment among younger buyers compared to other age groups.

Specifically, those in their 30s were the most active homebuyers among all age groups. Over the 1 year and 4 months, there were 53,839 transactions with an average housing price of 741 million KRW. Funding sources included jeonse deposits at 190 million KRW (26%), proceeds from real estate sales at 171 million KRW (23%), and bank deposits at 95 million KRW (13%). Borrowings amounted to 40 million KRW (5.3%), and gifts/inheritance accounted for 35 million KRW (0.47%), which were not insignificant.

Buyers in their 20s purchased 10,134 homes with an average housing price of 472 million KRW. Among these, the jeonse deposit succession rate was 71%, indicating a significant proportion of gap investment. Funding sources were jeonse deposits at 210 million KRW (43%), mortgage loans at 63 million KRW (13%), bank deposits at 52 million KRW (11%), and gifts/inheritance at 45 million KRW (9%).

For buyers aged 0-19, there were 212 transactions with an average housing price of 326 million KRW. The jeonse deposit succession rate was 97%, meaning most transactions were gap investments. Funding sources were jeonse deposits at 175 million KRW (65%) and gifts/inheritance at 80 million KRW (25%). These buyers leveraged lump sums obtained through gifts or inheritance to purchase homes using jeonse deposits.

Representative Cheon stated, "To prevent reckless gap investments, it is necessary to alleviate the anxiety that homeownership is becoming increasingly difficult," adding, "We will actively support the government's supply measures such as the 3rd New Town and the 2·4 measures to ensure they proceed without disruption."

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