Korean Job Discussion Forums

[AbbeFaria]

As usual, search is jacked up so my apologies if this has been done to death. I did try to find an existing thread before I created this thread.

The girlfriend and I are starting out 'settling down' talks and she brought up getting an apartment in the future and I'm trying to get an idea of what that entails. I've heard of key money but don't really know how that works. Do you get a loan from a bank as you would in the States? And obviously real estate prices differ wildly from place to place in Korea but what could I expect to pay for a mid-range apartment in a smallish city like Pohang? I'm just trying to get a general idea of what to expect.

If anyone has a link to an existing topic, I'll take that, too.

-S-

[John Stamos jr.]

I think you're talking about renting an apartment not buying one. I don't know about Pohang or loans, but it's pretty straight forward: Find an apartment and put key money down for it. Key money is just a ridiculously large deposit you put down like you would in the US. Modest averages are usually around 5-20 million won, but key money can be EXPENSIVE, especially that Jeonsae business. Just make sure you register it. You get the money back when you leave or if you find someone to take over your lease. And then you just pay the landlord monthly rent. My ladyfriend is from Pohang she just said Pohang is certainly/obviously cheaper, but I have no clue.

I put down key money for my own apartment here and I don't regret it. I like not having my job and my residence tied together, get some space, autonomy, etc.

[fustiancorduroy]

There are four main types of systems for renting/buying apartments here, and they are:

1) Rent (렌트)

This is when you pay monthly rent on your apartment with no deposit. The catch is you have pay a lot of the rent up front, usually one or two year's worth. Rent is usually for expats who live in expensive apartments, i.e. they pay 40 million won for one year's rent.

2) 월세

This is when you put down a fairly large deposit and pay monthly rent. The more deposit you put, the lower your rent will be. Typically, for every 10 million won you put for deposit, your rent will be lowered by 100,000 won a month. I don't know about Pohang specifically, but I'm guessing to get a decent sized place, say 25평, which would have 2 or 3 three bedrooms, an actual living room and separate kitchen, and bathroom with bathtub, you'd probably need to put down 10 million won deposit and pay around 700,000 a month rent. In some of the nicer parts of Seoul, a similar sized apartment would be double price: 20 million down, 1.4 million a month.

3) 전세

This is when you put down a very large deposit, typically 30 to 50 percent of the purchase price of the home. The benefit is you don't have to pay any monthly rent, though you will still need to pay 관리비 and other bills. You will get your money back when you move out, but you need to be careful in this situation. Make sure the real estate you are working with is reputable. Check the owner's financial situation. If his or her debt is more than half the value of the apartment, it would be better not to do 전세 in that case. 전세 can range from about 30 million won for an old, run down, but fairly large place to 5 billion won for 100평 penthouse apartment.

4) 매매

This is when you buy the apartment. It becomes yours. You can get a loan, but you need to have about 50 to 80 percent of the purchase price in cash. Housing is expensive in Korea. Even in Pohang, I'd wager that it would be hard to get a decent place for less than 80 million won. In Seoul, purchase prices range from about 80 million for an older 주택 style place, to 200 million to 1 billion for a decent medium rise apartment, to 10 billion won for a deluxe apartment like the one I mentioned above.

In any case, after moving into an apartment, you should register your name and address with the 동사무서 and/or the 구청. That way your deposit money will be protected and you have more legal resources available to you if there is a dispute with your landlord about the deposit money.

[motiontodismiss]

In many locations, jeonse is more than 60-80% of the purchase price. I've seen officetels in Ilsan that go for 95%.

[Jimskins]

Whatever you do, don't buy an apartment in Korea. It would be madness to do so now or for the forseeable future based on the state of the market, get jonsei.

[Wiltern]

If you do the weolse option, is there a minimum amount of time you need to stay (like a typical one-year lease in the US)?

[AbbeFaria]

[Captain Corea]

As mentioned above, you're most likely going to need more than 50% down - it's sometimes dependant on location though (speculative zones and such).

Also, be prepared that to qualify for a mortgage, your income may or may not be applicable.

[AbbeFaria]

[PRagic]

Wow, 100 million? Pohang is cheap! Good for you and your soon to be wife. In nice areas of Seoul, that wouldn't cover cheonsay on a decent 2 bedroom! Cheonsay on 3 bedroom apartments where we live are at 300 million+ for about 33 Pyung.

But, yes, the system is pretty straight forward when you buy, although a bit reversed from the US system. In the US, you qualify for a mortgage (or prequalify) and THEN you can buy. Here, you agree to buy and THEN go in to qualify for a mortgage, at least in many instances. Your future better half sounds good with the coin in that by having at least 50%, you're more apt to qualify for a loan on a 100 million won purchase.

Good luck to you. Personally, I wouldn't buy anything in Seoul as prices are heading south with no end in sight, but Pohang may be different. Ask your future wife to do some serious checking before you commit to the buy; renting or cheonsay might be better. At only 100 million to begin with, there might not be much room to go lower. Find out about historical trends there as a first step, do your research, and go into the deal with both eyes wide open.

[No_hite_pls]

[No_hite_pls]

I looked it up anyway.

"households on average spend 16% of their net disposable income on keeping a roof over their heads, the lowest level in the OECD, where the average is 22%."
The housing market is not expensive in Korea compared to their income.

http://www.oecdbetterlifeindex.org/topics/housing/

[giraffe]

These days, At least here in daejeon, jeonsei is about 3/4 of the price of the house. For example for a 200million won place we would need to put down 150 million won...

Most likely your income wont count towards a bank loan for jeonsei . Even if you make a crapload more money than your gf/wife. most banks will flat out just tell you they dont give out loans to foreigners.

If you ( as a foreigner) want to borrow money from the bank, It doesnt really matter how much money you have in the bank or how much you make. You need to have collateral ie: own an apt , own land , business ETC... Or you need to have a cosigner thats willing to put up there own collateral.

That being said, I've heard of foreigners getting mortgage loans by themselves. Not quite sure what they did though. =)

[Captain Corea]

[jvalmer]