“I’ll sell my house if you cut my deposit”…a rush to buy.

Mr. A, who rented an apartment in Dobong-gu, Seoul, for 550 million won in August 2021, is deeply troubled by the tenant’s request to return the deposit before the expiration of the global contract. The current market price has dropped by nearly 100 million won to 450 million won. Since he spent money on his child’s marriage last year, he has no spare funds, so he is thinking about selling his house at this time.

As the value of sublets has dropped significantly compared to two years ago, concerns about a reversal in the second half of this year are spreading. Like Mr. A’s case, many rental contracts signed at a high price in the second half of 2021 will expire in the second half of this year, causing him to return more than 10 to 20 percent of the original rental deposit per apartment. There is also a possibility that a large number of flipped properties will flood the real estate market.

For example, a private 84㎡ apartment in Mapo Ramian Purgio in Mapo-gu, Seoul, was signed with multiple global contracts in the second half of 2021 at a price of over KRW 1.1 billion. The current market price is around 900 million won. In most cases, the existing contracts are more expensive than the new contracts, so it is expected that landlords will have to return the rental deposit to tenants. This means that they will have to return at least 100 million won to 200 million won or more토토사이트.

In fact, there have been a number of contracts with lower security deposits than before. According to Real Estate R114 on the 10th, of the rental renewal contracts for apartments in the Seoul metropolitan area signed last month, there were 4004 transactions that were presumed to be rentals. Of these, 1713 (42.8%) were reduced renewals with lower security deposits.

The percentage of reduced renewals has remained in the 40% range since March, including 34.6% in January, 39.6% in February, 42.4% in March, and 44.5% in April. The average renewal deposit was $447.5 million, down $94.1 million from $541.6 million.

According to the analysis, households at risk of reversal tax, where the rental price is lower than the original rental deposit, account for more than half of the nation’s rental homes. The BOK said in a recent report that there were 1,026,000 households at risk of reversal taxes, or 52.4 percent of all rental units. The average price of these homes was 71 million won lower than before.

Considering the average gap between the number of households at risk of subletting (1066,000) and the average subletting deposit (71 million won), the amount of subletting is roughly 73 trillion won.

If sublet prices rise again and approach the market price of two years ago, the risk of reversal taxes may decrease, but this is unlikely. This is because it is difficult to expect a sharp rebound in rental prices in the short term as mortgage rates are unlikely to fall. An influx of tenants in the second half of the year is also considered a factor that will intensify the reversal trend.

“The problem of reversal is not one that can be overcome easily, but rather one that can last for more than a year,” said Kim Seung-jun, a researcher at Hana Securities. “In the second half of the year, when apartment move-ins are on the rise, lending rates are once again rising slightly, making it difficult for rental prices to rise.”

In particular, experts point out that there is a high probability that a large number of flipped properties from landlords who do not have enough funds will flood the market.

“The phenomenon of reverse flipping already started to occur in the second half of last year, and it is likely to spread as the expiration date of global contracts signed at high prices returns in the second half of this year,” said Lee Min-jae, a researcher at NH Investment & Securities. “In the case of landlords who have made gap investments, it is likely that they have used up all available loans, so there may be a situation where gap investment properties are sold in a rush.”

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