Soaring Seoul Jeonse Prices... Contract Renewal Request Right and Jeonse Rent Cap Passed by National Assembly

Weekly Apartment Price Trend Survey by Korea Real Estate Board
Seoul Jeonse Prices See Largest Increase in 7 Months

[Image source=Yonhap News]

[Asia Economy Reporter Moon Jiwon] Among the 'Three Lease Laws,' the right to request contract renewal and the rent ceiling system have passed the National Assembly plenary session, and it has been revealed that the monthly rent prices of apartments in Seoul are rising sharply every week. This is interpreted as landlords raising deposits or withdrawing rental listings before the full implementation of the Three Lease Laws.

According to the Korea Real Estate Board on the 30th, as of the 27th, the monthly rent prices of apartments in Seoul rose by 0.14% compared to the previous week. This is the largest weekly increase in about seven months since the survey on January 6. The increase rates in the metropolitan area (0.16%→0.18%) and provinces (0.13%→0.15%) also expanded.

In Seoul, the rise was clear in the four Gangnam districts: Gangdong-gu (0.28%), Gangnam-gu (0.24%), Seocho-gu (0.18%), and Songpa-gu (0.22%). Gangnam-gu saw increases mainly in relatively lower-priced complexes such as Gaepo and Daechi-dong, Songpa-gu in popular Jamsil-dong complexes and older buildings in Munjeong-dong, and Seocho-gu mainly in complexes near Jamwon-dong affected by redevelopment relocations and in Umyeon-dong.

Guro-gu (0.13%) and Geumcheon-gu (0.11%) also saw expanded increases due to relocation demand from Gwangmyeong New Town. Seongdong-gu (0.21%) rose mainly in large complexes near Haengdang and Hwangsimni Station areas, and Mapo-gu (0.20%) increased mainly in Gongdeok and Singongdeok-dong, where demand for proximity to workplaces is steady.

The ruling party and government’s promotion of the Three Lease Laws appears to be driving rent prices higher. The National Assembly held a plenary session that day and passed the amendment to the Housing Lease Protection Act, which includes the right to request contract renewal and the rent ceiling system. The amendment allows tenants to extend their existing two-year contract by an additional two years, and the rent increase is capped at 5% of the previous contract rent, with local governments setting the ceiling by ordinance.

Since the laws restrict landlords' property rights, there is an increase in landlords raising rental deposits before the implementation of the Three Lease Laws.

Seoul apartment prices rose by 0.04% this week, a smaller increase than last week’s 0.06%. It is analyzed that the sales market has contracted recently due to the government’s June 17 and July 10 measures limiting rental loans and raising property taxes.

Gangnam, Seocho, and Songpa districts each rose by 0.02%, showing a smaller increase than last week. Gwanak, Gangseo, Dobong, Nowon, and Yeongdeungpo districts also reduced their weekly increase rates, each rising by 0.06%. On the other hand, Sejong City’s apartment prices rose by 2.95% due to the administrative capital relocation issue, the highest increase nationwide.

Meanwhile, the right to request contract renewal and other laws passed by the National Assembly that day will be implemented immediately once approved by the State Council, signed by the President, and published in the official gazette.

The remaining law among the Three Lease Laws, the monthly rent reporting system, is expected to be processed at the plenary session on the 4th of next month. Since the system requires time to be established, it will be implemented from June next year.

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