"If You Haven't Experienced It, You Won't Know"... Avoiding Jeonse Due to Fear of Villa King

Seoul Multi-family Jeonse Transaction Volume Drops Sharply
Preference for Monthly Rent and Growing Jeonse Fraud Concerns Increase

[Asia Economy Reporter Onyu Lim] "This is the house where the Villa King made a gap investment. Never, ever feel safe. You won't understand unless you experience it yourself."

This is a review about an officetel in Incheon registered on the real estate review platform Jippoom. Recently, as large-scale jeonse frauds such as the 'Villa King' case have been revealed, tenants' anxiety has increased drastically. A Jippoom official said, "Recently, there has been a growing demand from users checking reviews to see if their security deposits were properly returned."

Villas in the Michuhol-gu area of Incheon Photo by Yonhap News

The spread of anxiety about villa jeonse can also be seen in the significantly reduced transaction volume. According to the Seoul Real Estate Information Plaza on the 24th, the number of multi-family and row house jeonse transactions in Seoul in November last year was 4,952. This is a 16.7% (990 transactions) decrease compared to 5,942 transactions in the previous month. In the first half of last year, the average monthly villa jeonse transaction volume reached 7,294, but it sharply declined within half a year. December is currently at a similar level with 4,052 transactions. Although there are still a few days left for actual transaction registration, it is unlikely to deviate significantly from this level.

The contraction of the villa jeonse market reflects a preference for monthly rent due to high interest rates, but the recently revealed Villa King jeonse fraud dealt a direct blow. Tenants are avoiding jeonse with large security deposits because it became known that there are groups, including building owners, developers, and real estate agents, who embezzle jeonse security deposits.

If landlords cannot find new tenants, they lose the means to return the security deposits to existing tenants. It is fortunate if they can get loans, but if not, existing tenants can only wait indefinitely. Ultimately, this vicious cycle further depresses the villa jeonse market.

A representative of a real estate agency in Hwagok-dong, Gangseo-gu, Seoul, where jeonse frauds were concentrated, said, "After the Villa King incident broke out, people looking for jeonse have completely dried up," adding, "Transactions have stopped abruptly, and our sales have dropped by more than half."

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