[EXPLAINER] Jeonse: How Korea's homeownership shortcut turned into breeding ground for fraud
For decades, Korea’s unique “jeonse” rental system was widely seen as a natural stepping stone to homeownership. The system spread during the country’s breakneck economic growth in the 1970s. Under jeonse, tenants pay their landlord a large lump-sum deposit — often equivalent to 60 to 80 percent of the property’s value — instead of monthly rent. The deposit is returned in full when the lease…
![[EXPLAINER] Jeonse: How Korea's homeownership shortcut turned into breeding ground for fraud](/img/6649983)
Jeonse, a distinctive rental system in Korea, allowed tenants to pay a substantial deposit to landlords in lieu of monthly rent. This practice emerged during Korea's rapid economic growth in the 1970s as the formal housing finance market was still developing. Landlords could use tenants' deposits to contribute to home purchases, make investments, or keep the money in high-interest accounts.
As the country urbanized, the need for housing increased, and jeonse provided a private alternative to bank financing for many households.
Written by urgent.news from The Korea Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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