Increase Rate of Deposit Money for Housing Set up New Record in 15 Years

The increasing rate of the deposit money for housing on August hike up 2.5 percent setting up a new record in past 15 years and the sales price of houses also surged the most since April of 1991.

The Housing and Commercial Bank announced that the sales price of houses increased by 1.9 percent, which is the greatest record since April of 1991 (2.2 percent).

By regions, the sales price of Seoul area hiked up by 2.6 percent, followed by 1.8 percent of the Metropolitan cities and 1.4 percent of other medium and small cities. Particularly in Seoul, while the northern area of the Han River recorded 2.0 percent rise, the sales price of the southern area surged 3.3 percent. By the size of house, while the large and medium houses had 1.2 percent and 1.6 percent increase of the sales price respectively, the price of the small houses increased by 2.6 percent.

The H&C Bank explained that ``easy loans for housing promoted by the competition among the banks encouraged the consumers to buy their own houses for their own residence or for rents.``

The recording increase of the deposit money for housing is driven by the greater demand at the moving season and by the transition of the house owners from the deposit rent to the monthly rent due to the drastic plunge of the deposit interest.

The rate of the transition from deposit rent to the monthly rent recorded 40.2 percent and 40.8 percent in Seoul and Kyonggi respectively and 22.1 percent and 21.9 percent of the total renters respectively had transferred their deposit rent to the monthly rent.

The deposit rents have increased by 2.8 percent in Seoul, 2.3 percent in Metropolitan cities, and 2.4 percent in the small and medium cities. The increase rate of apartment, single houses, and tenement houses recorded 2.7 percent, 1.8 percent, and 2.7 percent respectively.

The overall increase of the house price and the deposit rent by August recorded 6.4 percent and 12.7 percent respectively. In case of Seoul, the sales price has increased by 8.8 percent compared to the 15.8 percent rise of the deposit rent.

Lee Na-Yeon larosa@donga.com