If you are thinking of buying or leasing an apartment in Korea I highly recommend reading this article from a ROK Drop favorite Tom Coyner in the Joong Ang Ulbo:
It will soon be that dreaded time again for me – the renegotiation of my apartment lease. Thankfully, it happens just once every two years, but it is a real pain. The silver lining to this biannual cloud is that it forces me to look more closely at the Korean housing market, an important factor in most economic considerations.
At first brush, Korean real estate is as loopy as any foreigner may surmise about anything in the Korean economy.
First of all, there is a glut of slow-moving, unoccupied apartments – and yet prices remain artificially high. This is partially due to the universal axiom that real estate prices rise much faster than they fall. People naturally welcome seeing investment values inflate and resist recognizing shrinking values.
Second, housing costs are kept high, in spite of the vast supply of housing, due to a practice called jeonse, the non-interest-bearing, fully refundable deposit paid to the landlord in lieu of rent. Conventional rental properties can also be found, but most Korean tenants prefer jeonse as part of their strategy to eventually save enough money to buy.
During times of higher interest rates, jeonse was roughly 50 percent of the market value of the property. The landlord would then use the deposit for investment, or at least put the money in the bank, and enjoy the return. But thanks to very low interest rates, traditional jeonse levels have become increasingly unpopular among landlords. As a result, there have been two important developments. [Joong Ang Ilbo]
You can read the rest at the link.