KRW331.6 Billion Issued for Jeonse Loan Guarantees in April

 According to KHFC, in April this year, the provision of jeonse loan guarantees through the Housing Finance Credit Guarantee Fund (HFCGF) for households not owning homes totalled a record KRW331.6 billion.  This represents an 8% rise from KRW306 billion in March and a 39% rise from KRW233.0 billion in April 2007.

The net new provision, which excludes rollovers, rose 11% from KRW242 billion in March to KRW269.9 billion.  Compared to KRW152.2 billion in the same period last year, this marks a sharp rise of 77%.

On the basis of new users, the monthly number of jeonse loan guarantee users increased by 1,067 or 10% from 10,348 users in March to 11,415 users in April.

This sharp growth in jeonse loan guarantees may be ascribed to the continued rise of jeonse contract prices, especially in small apartment houses, as well as the imposition of a ceiling on pre-sale prices, which causes some home buyers to postpone purchasing homes and to rent instead.