It makes zero sense to me that you would have 80% or even 50% of a property’s market value and not just buy the place as opposed to letting someone else.

Do they not do home mortgages in South Korea? Are properties expected to go down in price?

Whether properties are expected to go down in price or not doesn’t change the fact that their is always a risk that property drops in price.

It would affect whether or not someone feels like buying it.

Since you seem to get the whole deposit back, it seems like it'd be preferable to rent in many situations if the landlord still assumes liabilities (repairs, disasters, etc) and the costs associated with them. If it's "free" to live there either way, I'd rather someone else cough up 10k for a new AC, heater, etc.

Why would you not want to pay more rent and invest the rest of the savings yourself? The landlord (at least in the US) almost always has to pick up the tab for all those repairs anyway.

You also get to avoid the risk of the landlord not giving you a large sum of money back.

Someone mentioned this elsewhere, but they can't. Housing in scarce and distributed via a lottery system.

Maybe buying a house would be less liquid?

Risk… you are exposed to the risk of decreasing property values if you buy.

But as a renter, you are exposed to the risk that your landlord won't have your deposit when you are ready to move out. To me, that seems like a bigger risk.

You know they at least own the house that costs more than what they owe you, so in a court you can probably regain your money

I don't know much about the system... is there an escrow service? Insurance?