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Swampfox10mm
Joined: 24 Mar 2011
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 Posted: Sat Mar 03, 2012 12:49 pm Post subject: Rent prices in Seoul ... wow! |
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I don't know how some of us with families are able to make it these days.
We moved into this place, a newer apartment from a well-known brand, which we considered expensive a year ago. We decided this winter we'd try to find a cheaper place... maybe an older villa in an area that wasn't scary.
Forget it.
Prices of older villas with 3 bedrooms (which are still smaller than the 2br we have), in worse areas further out, are now the same price as what we pay here. We checked, and the current place we live in has already gone up 300,000 per month in just one year.
I know single efficiency apartments are going up too, but nothing like family villas and apartments. We're on two incomes, but frankly, unless you own your own place, I don't see how some of you F-2 teachers on one income are able to make it unless you move further and further out to the extreme edges of Seoul or more. That and food prices are getting like hell.
I just don't see how this is sustainable for a lot of families. Something needs to be done. The gov't got worried about the housing crisis in the USA, so they froze the ability to get a loan for many people, or to get much of a loan. That ended up making it so few could buy, and that coupled with people waiting for a housing crash means many are renting. So because of all of this, we have rents going through the roof (and nobody renting wants Jeonsae).
As a side note, my best Korean friend got a note on the door last month that he was being evicted (he has a wife and 2 kids). Reason was that his landlords debt level reached critical mass and he was forced to sell. My friend lost his ENTIRE deposit -- we're talking over 100,000,000, and they had to move quickly and find another smaller place way out in Incheon with very little down and high rent. My friend makes OK money, but they are having troubles making it because their savings are gone and they have 3 kids. So rent is high. He's worried about getting anything back because in his situation, the rentor is basically the last to get anything out of the landlord when the landlord goes broke. Banks and everyone else get their cuts first, it seems. I asked him why he wasn't more careful about finding a landlord without huge debts, and he said it was too difficult to find any home available at the time in their price range, much less with a debtless landlord.
For the above reason, I'm now afraid to even dump a huge deposit into something, because unless we find the perfect landlord too, if there is a housing crash, it may take all of our savings with it! |
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modernseoul
Joined: 11 Sep 2011
Location: Seoul
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| Posted: Sat Mar 03, 2012 1:38 pm Post subject: Re: Rent prices in Seoul ... wow! |
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| Swampfox10mm wrote: |
I don't know how some of us with families are able to make it these days.
We moved into this place, a newer apartment from a well-known brand, which we considered expensive a year ago. We decided this winter we'd try to find a cheaper place... maybe an older villa in an area that wasn't scary.
Forget it.
Prices of older villas with 3 bedrooms (which are still smaller than the 2br we have), in worse areas further out, are now the same price as what we pay here. We checked, and the current place we live in has already gone up 300,000 per month in just one year.
I know single efficiency apartments are going up too, but nothing like family villas and apartments. We're on two incomes, but frankly, unless you own your own place, I don't see how some of you F-2 teachers on one income are able to make it unless you move further and further out to the extreme edges of Seoul or more. That and food prices are getting like hell.
I just don't see how this is sustainable for a lot of families. Something needs to be done. The gov't got worried about the housing crisis in the USA, so they froze the ability to get a loan for many people, or to get much of a loan. That ended up making it so few could buy, and that coupled with people waiting for a housing crash means many are renting. So because of all of this, we have rents going through the roof (and nobody renting wants Jeonsae).
As a side note, my best Korean friend got a note on the door last month that he was being evicted (he has a wife and 2 kids). Reason was that his landlords debt level reached critical mass and he was forced to sell. My friend lost his ENTIRE deposit -- we're talking over 100,000,000, and they had to move quickly and find another smaller place way out in Incheon with very little down and high rent. My friend makes OK money, but they are having troubles making it because their savings are gone and they have 3 kids. So rent is high. He's worried about getting anything back because in his situation, the rentor is basically the last to get anything out of the landlord when the landlord goes broke. Banks and everyone else get their cuts first, it seems. I asked him why he wasn't more careful about finding a landlord without huge debts, and he said it was too difficult to find any home available at the time in their price range, much less with a debtless landlord.
For the above reason, I'm now afraid to even dump a huge deposit into something, because unless we find the perfect landlord too, if there is a housing crash, it may take all of our savings with it! |
Everything is increasing worldwide, but whilst Seoul is expensive in comparison to the rest of Korea, if you compare it to London, Tokyo or Paris, it's not that bad.
An E-2 teacher has little chance of getting anything "nice" in Seoul, and others will find it tricky. But I guess it's partly down to Supply/Demand, everyone wants to live in Seoul and therefore landlords can charge excessive amounts. |
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Swampfox10mm
Joined: 24 Mar 2011
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| Posted: Sat Mar 03, 2012 2:36 pm Post subject: |
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Sorry, this is a discussion about price increases in Seoul, in a forum where we discuss Korea.
This has nothing to do with London, nor does London have much to do with but a small percentage of ESL teachers here. Same with Paris or Tokyo. If you want to discuss Tokyo, go to gaijinpot.
Rent prices in Seoul -- stay on topic, please. |
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modernseoul
Joined: 11 Sep 2011
Location: Seoul
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| Posted: Sat Mar 03, 2012 3:18 pm Post subject: |
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| Swampfox10mm wrote: |
Sorry, this is a discussion about price increases in Seoul, in a forum where we discuss Korea.
This has nothing to do with London, nor does London have much to do with but a small percentage of ESL teachers here. Same with Paris or Tokyo. If you want to discuss Tokyo, go to gaijinpot.
Rent prices in Seoul -- stay on topic, please. |
Fair point, sorry to digress from the topic at hand. |
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nathanrutledge
Joined: 01 May 2008
Location: Marakesh
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| Posted: Sat Mar 03, 2012 3:22 pm Post subject: |
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http://koreajoongangdaily.joinsmsn.com/news/article/html/432/2948432.html
I think every human being should be required to take basic economics classes to live.
The government decided to subsidize poor students housing. Now landlords simply raise the price to the amount of the subsidy. Ergo, we ALL pay higher prices.
Long term, I'm not too worried. Personally, I don't live in Seoul (  ) and the census data that came out a little bit back showed that Seoul had a net outflow of people for the first time (ever or in a really long time, can't recall), so LONG RUN, a bursting bubble, less people in the city, whatever - it's going to collapse soon. I'd say we've hit the peak - construction is still going strong, but Seoul is either losing people (as per the census) or staying even (margin of error), and people are starting to realize the benefits of living in the suburbs.
Just my two cents. |
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NYC_Gal 2.0
Joined: 10 Dec 2010
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| Posted: Sat Mar 03, 2012 3:27 pm Post subject: |
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Meanwhile, in Incheon the rent seems to be the same or lower. I'm leaving my decent officetel for a 1br with ample closet space in a few weeks. I was able to get my key money down to 2 mil (from the asking 5-10) and the rent is only 70,000 won higher than it would have been. One can always negotiate. The fact that you're married helps, in these cases, because it shows that you're (likely) not some fly-by-night renter, and that you (again, likely) are responsible.
Yes, the commute to Seoul takes about 45 minutes to an hour, but we save a ton of money.
Best of luck in your apartment search! |
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motiontodismiss
Joined: 18 Dec 2011
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| Posted: Sat Mar 03, 2012 3:42 pm Post subject: |
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ITE you should NEVER do jeonse. When it hits the fan, you're basically going to see your entire life savings evaporate. That and there's quite a few cons related to jeonse where the realtor takes the money and runs and you're left being a year late on your rent.
I personally would never live within the Seoul city limits. It's poorly planned, it's polluted, it's disgusting and it's just as boring as the rest of the country. I can't possibly justify the premiums.
| Quote: |
| The fact that you're married helps, in these cases, because it shows that you're (likely) not some fly-by-night renter, and that you (again, likely) are responsible. |
I take issue with this. If you're too poor to get married, the responsible thing to do is NOT to get married. If you can't afford them, the responsible thing to do is to not have children. Then again, you're looking at this from the perspective of a real estate ajumma and not someone capable of rational thought. |
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Evanzinho
Joined: 10 Apr 2008
Location: California
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| Posted: Sat Mar 03, 2012 3:51 pm Post subject: |
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| nathanrutledge wrote: |
I think every human being should be required to take basic economics classes to live.
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Exactly. The OP says "something needs be done", but it's because the government is 'doing something' that rents are increasing. If we'd just leave the market alone we wouldn't have these kinds of problems. |
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motiontodismiss
Joined: 18 Dec 2011
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| Posted: Sat Mar 03, 2012 4:07 pm Post subject: |
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| I'm a strong believer of the idea that if the government (or anyone for that matter) has nothing to do, then it/he/she should do nothing. Leaving the market alone would also mean letting the prices fall when they should. But this government would probably never let that happen. |
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Malislamusrex
Joined: 01 Feb 2010
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| Posted: Sat Mar 03, 2012 4:15 pm Post subject: |
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The government wanted to improve the housing sector, so the government went to banks and property developers to make a deal.
Government and the construction companies developed a lot of apartments.
Government and construction companies then realised it has been expensive to make these appartments and they need to get some money back. They went to banks to reach an agreement on subsidising bank loans to buy apartments.
Investment companies bought up the apartments with cheap capital, as the property was bought supply reduced and prices are now artificially high.
This has continued and what Korea has are empty apartment buildings that cost double what a family can pay, owned by an investment companies that are making profit from the governments / Korean tax.
But the investment company probably don't own the apartments, they take the profit.... government and the bank own the apartments.
The Korean government is so deep into this mess, now they have to support this bubble, but when it actually does burst it will cut house prices in 1/2, then we will all be going to China. |
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alongway
Joined: 02 Jan 2012
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| Posted: Sat Mar 03, 2012 4:18 pm Post subject: |
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| Quote: |
| ITE you should NEVER do jeonse. When it hits the fan, you're basically going to see your entire life savings evaporate. That and there's quite a few cons related to jeonse where the realtor takes the money and runs and you're left being a year late on your rent. |
How is the realtor going to take your money and run? The realtor never sees your money. You transfer your Jeonse directly to the owner. Jeonses can be insured so if the owner loses all his money you will get your money back. The jeonse system is in fact actually quite useful. The bigger the jeonse the more homework you should before paying it, but there is a lot to be said for living rent free.
If your friend lost his money, that's terrible, but he probably didn't have the deposit properly insured.
| Quote: |
| Prices of older villas with 3 bedrooms (which are still smaller than the 2br we have), in worse areas further out, are now the same price as what we pay here. We checked, and the current place we live in has already gone up 300,000 per month in just one year. |
I don't know where you're looking or what kind of deposit you have, but in Seoul, in not-scary areas, I've seen 3 bedroom villas for around 120,000,000 or some portion there of. 50,000,000 down 700,000 a month, etc.
I was just looking 3 months ago before getting into a 3 bedroom apartment, but I Also looked at many 3 bedroom villas. How many pyeong are you looking for? The ones I looked at were around 18 usable pyeong (don't know what the magic total was, but 18 pyeong with 3 bedrooms is enough for an office and a kid in addition to a decent living room and main bedroom and kitchen) |
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motiontodismiss
Joined: 18 Dec 2011
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| Posted: Sat Mar 03, 2012 6:06 pm Post subject: |
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| alongway wrote: |
How is the realtor going to take your money and run? The realtor never sees your money. You transfer your Jeonse directly to the owner. Jeonses can be insured so if the owner loses all his money you will get your money back. The jeonse system is in fact actually quite useful. The bigger the jeonse the more homework you should before paying it, but there is a lot to be said for living rent free.
If your friend lost his money, that's terrible, but he probably didn't have the deposit properly insured.
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Perhaps YOU should take an economics class. NOTHING is EVER free. There was, is, and will be no free lunch, ever. The interest you're giving up by not having that money in the bank plus the risk premium of leaving that money with someone who might be a con man (there's a team of con artists where one person acts as the owner and another person acts as the realtor), might be in debt up to their eyeballs, or of the value of the place falling 90% and the bank foreclosing on it (which is a VERY real possibility; see Japan) IS your rent. Not to mention, if you don't have the money to put down cash, you'd have to borrow it and that means interest and fees from the bank, not to mention insurance premiums. This all costs money. Money that doesn't fall out of the sky. Just because no money changes hands every month doesn't mean you're not paying rent. You ARE, you're just taking a greater risk with your money. At the end of the day the cost of rent is just about equal to the cost of jeonse at an equivalent place.
This is still a third world country (economically, no, but socially speaking, absolutely). One should NEVER trust a Korean farther than one can throw one. |
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alongway
Joined: 02 Jan 2012
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| Posted: Sat Mar 03, 2012 6:19 pm Post subject: |
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| motiontodismiss wrote: |
| alongway wrote: |
How is the realtor going to take your money and run? The realtor never sees your money. You transfer your Jeonse directly to the owner. Jeonses can be insured so if the owner loses all his money you will get your money back. The jeonse system is in fact actually quite useful. The bigger the jeonse the more homework you should before paying it, but there is a lot to be said for living rent free.
If your friend lost his money, that's terrible, but he probably didn't have the deposit properly insured.
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Perhaps YOU should take an economics class. NOTHING is EVER free. There was, is, and will be no free lunch, ever. The interest you're giving up by not having that money in the bank plus the risk premium of leaving that money with someone who might be a con man (there's a team of con artists where one person acts as the owner and another person acts as the realtor), might be in debt up to their eyeballs, or of the value of the place falling 90% and the bank foreclosing on it (which is a VERY real possibility; see Japan) IS your rent. Not to mention, if you don't have the money to put down cash, you'd have to borrow it and that means interest and fees from the bank, not to mention insurance premiums. This all costs money. Money that doesn't fall out of the sky. Just because no money changes hands every month doesn't mean you're not paying rent. You ARE, you're just taking a greater risk with your money. At the end of the day the cost of rent is just about equal to the cost of jeonse at an equivalent place.
This is still a third world country (economically, no, but socially speaking, absolutely). One should NEVER trust a Korean farther than one can throw one. |
If I put 100,000,000 down for a jeonse, I would otherwise expect to pay at least 1 million a month in rent. That works out to a 12% return over a year. That's a fairly high rate of return unless you get into much riskier investments. What's more risky? trying to make 12% on your own or leaving a jeonse with an owner you've checked out?
You might make more, you might make less. By using a jeonse you've guaranteed yourself 12% return on your money. So long as you do your homework. Now I suppose if you're lazy and don't want to do that, you get what you deserve. |
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Died By Bear
Joined: 13 Jul 2010
Location: On the big lake they call Gitche Gumee
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| Posted: Sat Mar 03, 2012 8:15 pm Post subject: Re: Rent prices in Seoul ... wow! |
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| Swampfox10mm wrote: |
I don't know how some of us with families are able to make it these days.
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Mistake to assume everyone rents. Quite a few own their own apts/houses, or were given real estate by parents that made it when the gettin' was good in Korea. Others still (non-teachers) get housing allowances from the companies they work for.
Last edited by Died By Bear on Sat Mar 03, 2012 8:23 pm; edited 1 time in total |
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Kimchifart
Joined: 15 Sep 2010
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| Posted: Sat Mar 03, 2012 8:22 pm Post subject: Re: Rent prices in Seoul ... wow! |
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| Swampfox10mm wrote: |
I don't know how some of us with families are able to make it these days.
We moved into this place, a newer apartment from a well-known brand, which we considered expensive a year ago. We decided this winter we'd try to find a cheaper place... maybe an older villa in an area that wasn't scary.
Forget it.
Prices of older villas with 3 bedrooms (which are still smaller than the 2br we have), in worse areas further out, are now the same price as what we pay here. We checked, and the current place we live in has already gone up 300,000 per month in just one year.
I know single efficiency apartments are going up too, but nothing like family villas and apartments. We're on two incomes, but frankly, unless you own your own place, I don't see how some of you F-2 teachers on one income are able to make it unless you move further and further out to the extreme edges of Seoul or more. That and food prices are getting like hell.
I just don't see how this is sustainable for a lot of families. Something needs to be done. The gov't got worried about the housing crisis in the USA, so they froze the ability to get a loan for many people, or to get much of a loan. That ended up making it so few could buy, and that coupled with people waiting for a housing crash means many are renting. So because of all of this, we have rents going through the roof (and nobody renting wants Jeonsae).
As a side note, my best Korean friend got a note on the door last month that he was being evicted (he has a wife and 2 kids). Reason was that his landlords debt level reached critical mass and he was forced to sell. My friend lost his ENTIRE deposit -- we're talking over 100,000,000, and they had to move quickly and find another smaller place way out in Incheon with very little down and high rent. My friend makes OK money, but they are having troubles making it because their savings are gone and they have 3 kids. So rent is high. He's worried about getting anything back because in his situation, the rentor is basically the last to get anything out of the landlord when the landlord goes broke. Banks and everyone else get their cuts first, it seems. I asked him why he wasn't more careful about finding a landlord without huge debts, and he said it was too difficult to find any home available at the time in their price range, much less with a debtless landlord.
For the above reason, I'm now afraid to even dump a huge deposit into something, because unless we find the perfect landlord too, if there is a housing crash, it may take all of our savings with it! |
On the upside, cheese is cheaper.  |
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