Outstanding jeonse loans at South Korean commercial banks fell from a peak of ₩168 trillion (approximately $122.4 billion) at the end of September last year to ₩163.72 trillion (approximately $119.3 billion) by the end of June this year, a decline of roughly ₩4.3 trillion (approximately $3.1 billion) in three quarters. Jeonse, a lease system based on a large refundable deposit instead of monthly rent, has become less attractive as loan rates rose from 2.64% in July 2021 to 4.19% in July this year. On a ₩500 million (approximately $360,000) loan, monthly interest increased from ₩1.1 million (approximately $800) to ₩1.75 million (approximately $1,300). Six-month variable rates on most jeonse loans, combined with a base rate in the 3% range, leave room for further increases to pass through with a lag. Tighter owner-occupancy rules, including a restriction starting January next year on jeonse loans for non-resident single-home owners, are also reducing supply and limiting gap investment (using jeonse deposits to finance additional home purchases). Seoul's rental market is experiencing broader pressure: monthly rents for multi-family housing reached ₩670,000 (approximately $490) in July, while multi-family jeonse and officetel deposits also set records. Apartment jeonse deposits for an 84-square-meter unit rose 7.2% year over year to ₩733.42 million (approximately $530,000) in the second quarter, while Seoul apartment rental listings fell 15.0% after the government's October 15 measures. Government plans to support non-apartment mortgages and initiate construction of 130,000 units in the capital region by 2030 are unlikely to quickly resolve the supply shortage, analysts said.