Aftermath of New Lease Law... Two- and Three-Room Jeonse Listings Locked Up and Prices Increased

Housing Transactions of 30~85㎡ Units Fell 22% in November Last Year
Jeonse Deposits Rose 3%... "Villa Listings Also Locked Due to Lease Renewal Rights"

[Image source=Yonhap News]

[Asia Economy Reporter Onyu Lim] Due to the impact of the jeonse housing shortage, an imbalance in supply and demand is emerging not only in Seoul's apartment market but also in the small- to medium-sized general housing market. It is analyzed that tenants who cannot afford the soaring apartment jeonse and monthly rent prices are increasingly moving to lower-tier housing.

According to the real estate platform Dabang on the 8th, the total number of jeonse and monthly rental transactions for detached (multi-family), multi-unit, and row houses in Seoul in November last year was 14,983. This is a 16.2% decrease compared to 2,902 transactions in the previous month. It is also the lowest monthly figure in the past year.

In particular, the transaction volume of small- to medium-sized houses with 2 to 3 rooms and an exclusive area of 30 to 85㎡ sharply declined from 10,987 to 8,544 during this period, a 22% decrease.

Dabang's analysis attributes the decrease in transaction volume to the implementation of the two lease laws, including the contract renewal request system and the jeonse and monthly rent cap system, which have caused a shortage of rental listings even in the non-apartment market.

As a result, rents are also on the rise. The jeonse deposits for 30~45㎡ and 45~60㎡ units rose by about 3% compared to the previous month, reaching 158.97 million KRW and 204.86 million KRW, respectively. However, the 60~85㎡ units showed a contrasting trend, with deposits falling by 0.68% to 226.08 million KRW.

On the other hand, one-room housing appears unaffected by the jeonse and monthly rent shortage. Although there is an oversupply of one-room and officetel units in the market, demand has decreased due to the expansion of online lectures at universities and other institutions. During the same period, the transaction volume of one-room jeonse and monthly rentals decreased by only 4.97%, from 6,381 to 6,064, and the jeonse deposit fell by 3.21%, from 163.9 million KRW to 158.65 million KRW.

A Dabang representative explained, "The one-room market is in its off-season during winter, and with the prolonged COVID-19 situation, online university lectures are expected to continue into next year, making it difficult for the market to recover."

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