Shrunken Jeonse and Wolse Transactions... Only Prices Soar

[Image source=Yonhap News]

[Asia Economy Reporter Kim Hyemin] This year, the volume of apartment jeonse (long-term lease) transactions in Seoul has sharply declined. Although the volume of monthly rent contracts, including half-jeonse, also decreased, their share in the overall rental market increased. This trend appears to be a continuation of the effects of the new Housing Lease Protection Act implemented at the end of July last year.

According to the Ministry of Land, Infrastructure and Transport's real transaction price disclosure system on the 1st, a total of 6,743 apartment lease contracts were signed in Seoul in January this year. Compared to the same period last year (16,179 contracts), this represents a steep drop of 58.3%. It is also 35% lower than the previous month's 10,346 contracts.

This is the first time since statistics began in 2011 that the monthly lease transaction volume in Seoul has fallen below 10,000. However, considering that it takes some time for transactions to be officially reported and confirmed, the final transaction volume may increase slightly.

In last month's lease transactions, the decrease in jeonse was significant. The total number was 4,636, nearly 7,000 contracts (60%) fewer than the same period last year (11,537 contracts). During the same period, monthly rent transactions also dropped by more than half, from 4,642 to 2,107 contracts. However, while the share of jeonse decreased from 71.3% to 68.7%, the share of monthly rent increased from 28.7% to 31.3%.

This is also reflected in the recent increase in jeonse and monthly rent listings on the market. According to Asil, an apartment real transaction information platform, the number of jeonse and monthly rent listings increased by 16.6%, from 30,755 to 35,865 during January. Yoon Jihae, senior researcher at Real Estate 114, said, "Typically, transactions decrease in midwinter, but demand for jeonse and monthly rent remains steady due to consistent moving needs, so transaction volumes do not fluctuate significantly. If confirmed transaction volumes drop sharply, it could be an unusual phenomenon."

The upward trend in jeonse and monthly rent prices continues steadily. According to Real Estate 114, the jeonse price in Seoul in the last week of January rose by 0.18% compared to the previous week. In Nowon-gu, a jeonse contract worth 1 billion KRW was signed. A 134.74㎡ (exclusive area) apartment in Sinan Dongjin, Junggye-dong, was leased for 1 billion KRW on the 4th of last month. The rise in jeonse prices is also pushing up monthly rent prices, including half-jeonse. At Kkumui Sup SK View 84.93㎡ in Wolgye-dong, Nowon-gu, the deposit was around 300 million KRW with a monthly rent of 850,000 KRW until the end of last year, but on the 20th of last month, a contract was signed with the same deposit and a monthly rent of 1 million KRW.

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