Slowdown hits Korean home lease system

[SEOUL] A lengthy property market slump and low interest rates are threatening the future of a uniquely South Korean home lease system that traces its roots back to the 19th century.

Jeonse contracts have been a mainstay of the South's housing market for decades, offering tenants the enticing, and at first sight startling prospect of not actually paying rent.

Instead, the tenant forks out a hefty, up-front deposit - typically around 40 per cent of the property's value - which is then refunded in its entirety, or renewed, after two years.