COVID-19 Leads to Decrease in Monthly Rental Transactions of Single-Family and Multi-Family Houses

Seoul Detached and Multi-family Monthly Rent Average Transaction Volume and Housing Supply Trends

[Asia Economy Reporter Lim On-yu] An analysis has emerged showing that the volume of monthly rent transactions for detached and multi-family houses has decreased due to the impact of the novel coronavirus infection (COVID-19).

On the 11th, according to an analysis by Zigbang of confirmed transaction date data for monthly rent of detached and multi-family houses (including one-room units) in the Seoul area, the average monthly transaction volume from January to April this year was 5,736 cases, a 6.3% decrease compared to last year’s average monthly transaction volume (6,118 households).

Ham Young-jin, head of Zigbang Big Data Lab, analyzed, "Although online model houses and other methods have been introduced in the sales market due to COVID-19, existing houses such as detached and multi-family houses, where it is difficult to avoid face-to-face methods in the process of viewing or transacting, have seen a decrease in transaction volume." He added that as universities conducted online lectures, the demand for rental rooms from college students, who are a major source of demand for one-room units, also decreased, leading to a reduction in one-room monthly rent transactions.

By autonomous district, the transaction volume of detached and multi-family houses increased compared to the previous year only in Gwanak-gu (5.0%), Dongdaemun-gu (10.7%), and Seongbuk-gu (3.9%), while the transaction volume decreased simultaneously in the other 22 districts.

By area size, the transaction volume for houses with a contract area exceeding 30㎡ showed a decrease rate exceeding 10% compared to the previous year. The largest decline was in the 45?60㎡ contract area category at 18.6%, followed by 60?85㎡ (-18.5%), 30?45㎡ (-12.4%), and over 85㎡ (-10.3%).

On the other hand, the ultra-small houses with a contract area of 20㎡ or less, which are relatively affordable, increased by 7.9% compared to last year, and the 20?30㎡ contract area category showed a relatively small decline of 1.4% in transaction volume.

The average monthly transaction volume of monthly rent for detached and multi-family houses in Seoul has been declining over the past five years. Zigbang views this trend as related to the decrease in existing stock and newly completed housing supply. In Seoul, many cases involve demolishing old houses with safety issues through redevelopment and reconstruction and building new apartment complexes, resulting in a decrease in the volume of detached and multi-family houses themselves. The continuous supply of alternative products such as urban lifestyle housing and officetels is also cited as a reason for the decrease in transaction volume.

Seoul Detached and Multi-family Houses Average Converted Monthly Rent Annual Trend

Accordingly, the average converted monthly rent for detached and multi-family houses in the Seoul area this year was 557,500 KRW, a 1.5% increase compared to last year (549,000 KRW). It is interpreted that the reduction of relatively inexpensive old houses has influenced the rise in monthly rent. Lab head Ham predicted, "The decrease in transaction volume of detached and multi-family houses in the Seoul area will continue due to demand moving to smaller houses or other areas in search of more affordable prices."

This content was produced with the assistance of AI translation services.