Korean Job Discussion Forums

[Stan Rogers]

My school just informed me that I have to move out of my apt because my landlord is demanding a massive increase in the key money deposit.
The school says that rents are going up 30-40 % all over Seoul.

Has rent gone up that much in Seoul? Is a 30-40% increase legal?

[happiness]

japan'd

yeah, and im sure its not all over seoul, only seoul in their minds.

face saving.

[atwood]

[Slowmotion]

I was talking to a real estate agent yesterday, she said that 10mil increase in key money used to take off like 100,000 in rent, now it only takes off 5,000.

Seoul: where prices keep increasing, but not our salaries!

[War Eagle]

Last year, the official figure was that key money increased 13%. However, the actual amount is closer to 40-50%. There is currently a shortage of housing in Seoul due to regulations that were past a few years back, discouraging developers from building new apartments.

The high prices are expected to continue for the next year or two, but will then decrease due to development and new government regulations to fight the rapid increase.

EDIT: In my building, the price of key money just went from 120,000 US to 140,000 US this week. There must have been "something" to spark this since it seems to be coming from multiple landlords simultaneously.

[riverboy]

Yes. Key money is going through the roof. Largely due to the fact that people are not buying apartments and need the money to finance their housing debts.

My apartment was 120 000 000won two years ago and we expect to pay 170 000 000 won in the summer.

[toadkillerdog]

Not just Key money is going up and not just in Seoul either. I bought my apartment in Daejeon 5 years ago for W165,000,000. Not a new place but very nice in a great neighborhood. Out of the blue, two weeks ago, I was offered W225,000,000.

My father-in-law is a real estate lawyer and he advised we hold on untill the building hits its 20th "birthday" as we didn't buy the place as an investment and it is currently generating positive rental income for us. (My uni supplies housing and we are renting our place out).

[Stan Rogers]

Aren't there rent control laws about this sort of thing?

How can the government throw a blind eye to such widespread price gouging by landlords?

[rickpidero]

Does anyone else feel like the whole key money thing is a giant Ponzi Scheme and could someday come crashing down?

[Xuanzang]

[Jake_Kim]

This is all over the capital area and LMB administration is getting bombarded because of it.
Low interest rate + insufficient supply of smaller housings + market expectation that house prices will fall in the future, causing people to hold out on new purchases and to look for short-term alternative
Simply, those in or around the capital are screwed.

[Milwaukiedave]

[Lazio]

As far as I see, real estate is not a good investment these days. Prices are dropping or are steady for the last 1-2 years. I know several people around us who bought apartments a couple of years ago and in almost all cases the current market value is lower than the purchase price was. Sadly, they were hoping to get hundreds of millions in profit after a while and mostly they only pay interest on their mortgage. So even the current value is little higher, over the years they payed tens of millions in interest.
Since the market is unstable right now, there is a higher demand for jeonse, because people are holding on to their money and waiting for more promising conditions. That's just my opinion on the issue.

[Unposter]

IMHO, Key money is going to continue increase. Usually key money is roughly half the value of the residence but these days it is often a quarter so it has lagged behind land values.

Key money is quite a good value at the momment and landlords know this so they can increase their demand for deposits and people will be willing to pay it so long as it is a better value than buying. I don't see this trend discontinuing for a while or at least until key money costs are in line with property values.

The same thing seems to be happening in the U.S. Renting is currently a good value in many housing markets. But, eventually as demand for places for rent increase, eventually it will even out and tip in favor of buying and housing prices will start to increase again.

This is a common occurance in this type of housing market.

Fortunately, most ESL/EFL teachers in Korea don't have to put a deposit down on a place as the system here is very different than back home and housing is a major undertaking here. But, Korea has traditionally been a very sedintary society where generations have lived on the same piece of land. Combine this with Seoul being the center of everything and you have the perfect storm for expensive housing.

Even Japan, which the Korean housing situation is sometimes compared, has more urban, governmental and economic centers than Korea. Korea, for all intensive purposes is one city-state with suburbs out to Busan.

Few ESLers are used to such a housing market for these reasons and make a number of assumptions based upon their home countries that just don't make sense.

Seoul really is a very expensive place to live and for good reason. But, again, most of you don't have to worry much about it.

[zappadelta]

Key Money does not equal Joense. You guys know that right?