South Korea’s renters face bigger deposits—and costlier loans

An analysis published by Yonhap on November 15 puts the average deposit for jeonse households at 217.97 million won in 2025, up from 161.62 million won in 2019. That is another 56.35 million won to assemble, a nominal increase of 34.9%. Average borrowing to finance those deposits grew faster: 53.0% over the same six years.⁠2

Those figures describe an earlier household snapshot, not today's asking prices. But newer observations show the pressure has not disappeared: jeonse market prices rose in September 2026, annual rental inflation accelerated in October, and the average rate on newly extended jeonse loans reached 4.57% in September. The squeeze is both on the money needed upfront and on the cost of financing it.⁠2⁠27

Under jeonse, landlords are obliged to return the deposit when the lease ends. Seoul Metropolitan Government guidance describes leases lasting one to two years. Monthly rent, often called wolse or weolse, generally combines a smaller deposit with a recurring payment. A jeonse deposit therefore is not money permanently spent on rent—but it remains tied up during the tenancy, and borrowed money carries interest.⁠31

The household analysis found average deposit-financing debt rose from 30.33 million won in 2019 to 46.39 million won in 2025. This includes secured and unsecured borrowing used to fund deposits, not all the debt those households owe. Its growth exceeded deposit growth by 18.1 percentage points.⁠2

Debt relative to the deposit rose from 18.8% to 21.3%. That describes the relationship between the reported averages: it does not mean 21.3% of tenants borrowed, or that every household financed precisely that share of its deposit.⁠2

There is also an important qualification to the six-year surge. Average deposit borrowing fell in the latest two survey years. After annual increases in the teens during 2020–2022, growth slowed to 0.4% in 2023, followed by declines of 2.1% in 2024 and 1.0% in 2025. The long-run increase is not evidence of a continuing acceleration in loan balances.⁠2

Yonhap offered several possible explanations: higher interest costs discouraging borrowing, an earlier period of falling deposits at lease renewal reducing financing needs, and households moving into monthly-rent or mixed arrangements. These are interpretations, not a measured breakdown of what caused the decline. Successive averages can change when different households enter or leave jeonse.⁠2

The underlying Household Finance and Welfare Survey, jointly produced by the National Data Agency, Financial Supervisory Service and Bank of Korea, covers about 20,000 households nationwide. Its 2025 assets and debts refer to March 31, 2025, and its monetary figures are not adjusted for inflation. That overall sample is not the number of jeonse households behind these particular averages.⁠7

The published analysis does not specify the jeonse subsample size, weighting details or whether the debt average includes households with no deposit-financing borrowing. Nor does it establish that the same families experienced the full six-year increase. The comparison starts in 2019 because that is the earliest year available for online microdata analysis—not because it marks a demonstrated turning point in the rental system.⁠2⁠5

The newer market figures point upward. KB Financial Group Management Research Institute's October review reported nationwide jeonse prices rose 0.32% in September 2026 from the previous month, slightly faster than August's 0.30%. The capital region rose 0.56%, including increases of 0.64% in Seoul and 0.59% in Gyeonggi Province.⁠2

The pressure extended beyond the capital: five major noncapital cities rose 0.17%, and other provincial areas increased 0.09%. KB's jeonse supply-demand index reached 120.7, its highest reading since the 2020 rental-law changes. That is an index reading, not a percentage price increase.⁠22

KB's researchers point to fewer newly completed homes, existing tenants renewing rather than releasing properties back onto the market, and would-be buyers renting instead. They also identify some nonresident landlords moving into their properties or offering them for sale after announced tax changes. These are plausible mechanisms for reducing rental availability, but the evidence does not assign a share of the price increase to each—or establish that renewal protections alone caused it.⁠2⁠22

Transactions show a changing market as well as a tighter one. Nationwide jeonse and monthly-rent transactions totaled about 199,000 in August, down 5.6% from July and below the recent five-year monthly average of 226,000. Jeonse transaction volume fell 12.7%; monthly-rent contracts accounted for 70.0% of rental transactions. That is the mix of contracts signed during the month, not the share of all tenants living on monthly rent.⁠22

Moving into that market does not necessarily mean moving into cheaper housing. October's national consumer-price figures showed monthly-rent inflation at 1.5% year over year, matching December 2013 and the highest rate since then. Jeonse inflation reached 1.4%, its highest since February 2023.⁠27

Combined rental inflation reached 1.4% in October, matching December 2022 and the highest rate since that month. It had held at 0.9% in January–March and 1.0% in April–June, then widened by a tenth of a percentage point each month from July through October. Rent was still rising more slowly than overall consumer prices, which increased 2.8% annually in October. Its significance here is the combination of housing payments, deposits and financing costs—not that rent has overtaken every other household expense.⁠27

The national average also conceals local differences. Ulsan led October's combined rental inflation at 2.4%, followed by Seoul at 2.1% and Sejong at 1.6%; those were the only three regions above the national average. Gyeongbuk recorded a 0.1% annual decline.⁠27

These consumer-price figures answer a different question from KB's monthly market-price changes. The rental consumer-price measure surveys about 11,000 rental households monthly and includes existing and new contracts, so it reflects market changes with a lag. Someone looking for a new lease may face a larger increase than the national inflation rate suggests. Neither measure determines a particular tenant's renewal bill or interest payment.⁠1⁠27

For new borrowers, rates add a distinct cost. Yonhap, citing Bank of Korea statistics, reported that newly extended deposit-bank jeonse loans carried an average annual rate of 3.70% in May 2025, compared with 4.57% in September 2026—a net increase of 0.87 percentage points over 16 months. Reproductions of the central bank's series put August 2026 at 4.35%, making September's increase 0.22 percentage points; the September observation is marked provisional.⁠2⁠37⁠40

On an unchanged 100 million won loan, those rates imply annual interest of 3.70 million won versus 4.57 million won: an additional 870,000 won. The illustration assumes each rate applies for a full year and excludes fees and principal repayments. It isolates the rate effect without assuming a household has also borrowed more. Existing borrowers pay the rates set by their own contracts, and the March 2025 debt averages cannot be treated as September 2026 balances.⁠1⁠7

Nam Hyuk-woo, a researcher at Woori Bank's Real Estate Research Institute, expects scarce listings to limit the prospect of a sharp short-term price decline. As quoted by BigGo Finance, he argued that rental-price stability must precede broader housing-market stability.⁠1

That remains an outlook, not a promise. Whether available rental housing increases and new-loan rates ease is unresolved. A household unable to assemble a jeonse deposit may seek monthly rent instead, potentially adding demand to a market where recurring payments are already rising. The practical problem is not simply choosing between two contract types. It is finding an affordable way into either one.