My first brother-in-law’s family moved to another apartment last week, August 25th. We went to their new home last Saturday evening for the housewarming. They moved from a two-bedroom 26-pyeong unit to a big (in Korean standard) 44-pyeong one in a different building but in the same complex. A pyeong is equivalent to 3.3 square meters, so a 44-pyeong unit is about 145 square meters.
How much are apartments in South Korea?
Apartments in South Korea are not cheap! It all depends on where you live. The area north of the Hangang (Han river as “gang” means river in Korean), which is called “Kangbuk” is cheaper than the area south of it, which is “Kangnam.” We’re poor so we all live in the “Kangbuk” area of Seoul. 😀
How expensive are apartments in South Korea or specifically in Seoul? If you will check the real estate websites, you’ll find two-bedroom 23-pyeong apartments in Kangbuk on sale from 160,000,000 KRW (about US$160,000). While the 44-pyeong apartments in the Cheongdam-dong (Beverly Hills of Korea?) area of Kangnam district can go as high as 1,400,000,000 (US$1.4 million)!
It’s quite difficult to purchase an apartment if you’re a young couple. An alternative to purchasing is by what Koreans call “jeonse”. The jeonse system works with the tenant depositing a huge amount of money (like 90,000,000 KRW or $90,000 for a 23-pyeong apartment in Kangbuk) to the landlord. The jeonse contract is usually for two years but it can be extended. The good thing is you don’t need to pay a monthly rental fee. The landlord uses the money for another business or saves it in a high-interest yielding time deposit. When the contract expires, you can get the whole amount of the security money (a.k.a. key money) from the landlord. It’s free rent so long as you have a huge amount of moolah for the deposit.
For people who don’t have enough money for a big deposit, there’s also “wolse” wherein the tenant pays a monthly rental to the landlord. Of course, the amount to be paid depends on the location of the apartment but 500,000 KRW is not uncommon for a small apartment.
My brother-in-law is quite lucky because was able to get a spacious apartment cheaply. There are only two units in every floor and it’s in the same complex where they have lived for more than eight years. There’s a heating system and airconditioning. It’s still quite empty when we visited but everybody noticed the new television that they have… a 42-inch Samsung PAVV!