Quarterly housing affordability index South Korea 2017-2024

As of the first quarter of 2024, the housing affordability index in South Korea stood at just under 63 points. The third quarter of 2022 saw the first drop in figures since 2020. The lower the index value, the more affordable a home is for a median-income household. 

Apartments in South Korea

Average apartment prices in South Korea had risen for almost a decade before 2022. The country's popularity worldwide helped it become an economic powerhouse, attracting young workers from the countryside to large cities in hopes of taking part in or benefiting from this growth. As such, apartments are an attractive option for cities, optimizing space as they become more crowded. In terms of financing a new home, the leasehold deposit system exists as an alternative to traditional monthly rentals in Korea. 

Jeonse and leasehold deposits

Jeonse is a leasehold deposit system in Korea where, instead of paying rent monthly, people pay a large deposit equivalent to a share of a property's value. In exchange, the person receives the right to reside in the property as a tenant for a limited amount of time. Granted, the up-front cost is high, and it is common to receive loans from banks to pay for the leasehold deposit. It had traditionally been a popular method as you could live in a housing unit without worrying about rent for one or two years. However, this system is slowly being phased out as interest rates, the large up-front cost, and cases of jeonse fraud have turned people away.