[skim1420]

In Seoul in the late 90s I paid some $50K equivalent jeonse for a ~1000 sqft apt, with no further monthly rent. From what I understood, the landlord can make back something equivalent to rent via common interest rates. I was young and frankly didn't understand the exposure or workings at play in this article.

Historically, in Korean culture it was very common for the extended family to live together. When a child married they often continued to reside with the parents/in-laws until they had saved enough money to move out on their own. Jeonse is far less than the amount required to buy a place, and because they get the full amount back when they move out to a bigger/nicer place (more jeonse), they can build up their savings until they have enough to buy a place.

Back then mortgages were rather rare and even monthly rents weren't that common. Things are far different now of course.

[hocuspocus]

> Jeonse is far less than the amount required to buy a place

That depends on interest rates. I lived in Korea between 2010 and 2015 and in the end jeonse really didn't make sense anymore. I had a German coworker who went straight from company paid housing to buying his own place after two years, which is not easy as a foreigner. I regret not doing the same. Of course if you look at the higher end of the market, the relative difference can still be fairly substantial. But I lived in an area where you could buy an apartment for say 200M KRW while the jeonse would be 190.

[em-bee]

actually, the reason to live with the parents had nothing to do with money. traditionally, the oldest son would take over the household of his parents when he gets married.

this is still very common in china and it is seen in many other cultures, so i expect korea to be similar.