Monthly leases account for more than 60% of Korea's housing rental system in 2016: report

Monthly lease agreements accounted for more than 60 percent of South Korea's housing rental market last year as fewer people opt for the so-called "jeonse" system, a report showed Wednesday.

According to the report by the state-run Korea Development Institute, 60.5 percent of people paid monthly rent in 2016, while 39.5 percent lived in jeonse homes.

In 2010, jeonse was the most common housing rental type in the country, at 50.3 percent.
 

(Yonhap)

Jeonse is a home rental arrangement unique to South Korea, where tenants pay a large sum of money as a deposit instead of paying monthly fees. Landlords profit from the large deposits before returning the entire amount when the lease expires.

The KDI report said low interest rates have encouraged landlords to switch to monthly rent.

South Korea's key rate has remained at a record low of 1.25 percent for more than a year. (Yonhap)