35 Landlords Renting Out Over 100 Jeonse Units... Deposit Amounts to 1 Trillion Won

The Most Owned Houses: 559 Units in Gwangju
Year-End Reverse Jeonse Crisis Expected to Peak... Multi-Homeowner Management Needed

It has been confirmed that there are 35 individual landlords who own more than 100 houses and have subscribed to rental deposit return guarantee insurance. The deposit balance they received from tenants amounts to approximately 1 trillion won.

According to data submitted by the Housing and Urban Guarantee Corporation (HUG) to Park Sang-hyuk, a member of the National Assembly Land, Infrastructure and Transport Committee from the Democratic Party of Korea, the total number of houses insured by 35 landlords who have subscribed to rental deposit guarantee insurance for 100 or more houses is 6,349.

The landlord with the most houses insured under the rental deposit guarantee insurance holds insurance for 559 houses, all located in Gwangju Metropolitan City. The guaranteed amount is 97.9 billion won, with an average deposit of about 175 million won per house.

The landlord with the second highest number of insured houses has 375 houses and received deposits totaling 104.4 billion won. The average deposit per house is 278 million won. Of these houses, 313 are located in Seoul, with the remainder in the metropolitan area including Gyeonggi Province (51 houses) and Incheon (11 houses).

The third largest landlord rents out 307 houses in Busan and has received deposits amounting to 21.6 billion won. The fourth place has 291 houses with a deposit balance of 85 billion won, and the fifth place has 266 houses with 16.7 billion won.

The total deposit balance of guarantee insurance subscribed by landlords renting out 100 or more houses reaches 966.3 billion won. The deposit balance for individual landlords with 30 or more insured houses is approximately 2.7723 trillion won.

[Image source=Yonhap News]

As the reverse jeonse crisis, the biggest cause of jeonse fraud damage, is expected to peak in the second half of this year, the need to manage multi-home landlords like these is increasing.

Accordingly, the government has decided to temporarily ease regulations for one year starting at the end of this month, limited to loans for the purpose of returning deposits to respond to the reverse jeonse crisis. Landlords who take out additional loans to protect the next tenants will be required to bear the cost of jeonse deposit return guarantee insurance premiums.

In addition, the subscription requirements for rental deposit guarantee insurance, which landlords are obligated to subscribe to, will be strengthened. Currently, landlords are allowed to subscribe to rental deposit guarantees up to 150% of the publicly announced price (based on apartments under 900 million won).

However, going forward, it is expected to be strengthened to around 126% of the publicly announced price, similar to the jeonse deposit return guarantee. This is to prevent excessive guarantee insurance, which causes jeonse prices to rise excessively.

Meanwhile, as the jeonse market is shaken by the reverse jeonse crisis, demand has shifted to monthly rent, causing difficulties for tenants.

According to the Seoul Real Estate Information Plaza, from January to May, the total number of jeonse and monthly rent transactions in Seoul was 229,788. Of these, monthly rent transactions were 117,176, accounting for 51%. This is the first time since the Real Estate Information Plaza began compiling related statistics in 2011 (January to May basis) that the share of monthly rent in Seoul's housing rental market has exceeded 50%.

Also, according to Real Estate R114 on the 9th, high monthly rents exceeding 2 million won accounted for 9.5% this year over the past five years. This is nearly double the 4.9% in 2019. In fact, the average monthly rent in Seoul rose from 830,000 won in 2019 to 970,000 won this year, an increase of 140,000 won.

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