One Year After Lease Law Enforcement, Jeonse Transactions Decrease by 14%... Double Jeonse Also Intensifies
Number of Jeonse Contracts in the First Half of This Year Decreased by 13.9% Compared to Just Before the New Lease Law Implementation
Average Jeonse Deposit Difference Between New and Renewal in Gangnam Apartments Exceeds 200 Million KRW
One year after the new Lease Protection Act was implemented, the number of jeonse (long-term lease) contracts for apartments in Seoul has decreased, and the phenomenon of "double jeonse prices," where there is a widening gap between the deposit amounts of new jeonse contracts and renewal contracts, has intensified.
According to data received by Kim Sang-hoon, a member of the National Assembly's Land, Infrastructure and Transport Committee from the Ministry of Land, Infrastructure and Transport on the 14th, the number of reported jeonse transactions for apartments in Seoul in the first half of this year was 70,003, a 13.9% decrease compared to the same period last year (81,725 transactions) just before the new Lease Protection Act was enforced. Additionally, the gap between the average deposit for new contracts and the average deposit for renewal contracts in Seoul apartments reached 96.38 million KRW.
In July of last year, just before the enforcement of the Lease Protection Act, the difference between new contract deposits and renewal contract deposits varied by autonomous district, so the double price phenomenon did not appear. However, by June of this year, in all 25 autonomous districts, new contract deposits were higher than renewal deposits, solidifying the double price phenomenon.
In particular, the gap in Gangnam-gu apartments exceeded 200 million KRW. This was followed by Jongno-gu at 193.88 million KRW, Seocho-gu at 186.41 million KRW, Seongdong-gu at 179.30 million KRW, Mapo-gu at 171.79 million KRW, and Dongjak-gu at 150.31 million KRW.
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Assemblyman Kim stated, "In a situation where the double jeonse prices have become entrenched, tenants end up bearing higher deposits when signing new contracts after exercising their right to renew, which ultimately increases their burden. Artificial price controls have reduced the volume of jeonse and caused market distortions, undermining housing stability."
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