"Monthly Rent Equals Average Person's Salary"... Increasing High Monthly Rents in Seoul

Over 2,500 Cases of High Monthly Rent Exceeding 3 Million Won Last Year
Proportion Surpasses 1% for the First Time
Monthly Rent Shift and Price Surge Due to Jeonse Price Spike

[Asia Economy Reporter Kim Hyemin] The proportion of high-priced monthly rents in the Seoul jeonse and wolse market, reaching several million won, is on the rise. This is because the share of monthly rents has increased since the implementation of the three lease laws, coupled with landlords passing on tax burdens and loan regulations, causing monthly rent prices to rise significantly.

According to the Ministry of Land, Infrastructure and Transport's actual transaction price disclosure system and the Seoul Real Estate Information Plaza on the 9th, the proportion of high-priced monthly rents exceeding 3 million won per month in the Seoul apartment market last year was 1.31%. Out of a total of 189,440 jeonse and wolse transactions, 2,500 cases corresponded to this.

Compared to 2019, before the new lease law was enforced, this figure has nearly tripled. Until 2019, transactions with monthly rents over 3 million won numbered 938, accounting for about 0.51% of all jeonse and wolse transactions. However, in 2020, it increased to 1,469 cases, or 0.75%, and the growth accelerated last year. In particular, the proportion of high-priced monthly rents in December last year was 1.53%, exceeding the average, and this phenomenon intensified in the second half of the year.

This can also be confirmed through individual cases. An 84㎡ unit in Mapo Raemian Prugio Complex 2 in Ahyeon-dong, Mapo-gu, was transacted in 2019 with a deposit of 10 million won and a monthly rent of 1.9 million won. However, the monthly rent rose to 2.3 million won in 2020, and in October last year, a contract was signed at 3 million won. Over two years, while the deposit remained at 10 million won, the monthly rent increased by 1.1 million won. Until 2019, there were no monthly rents exceeding 2 million won, but last year, there were four transactions with monthly rents over 3 million won.

The increase in such high-priced monthly rents is interpreted as a result of a rise in newly traded jeonse prices after the lease law enforcement, leading to more cases converting to monthly rents. At the time of new transactions, landlords have responded by converting the increase in jeonse prices into monthly rents or raising the monthly rent. Moreover, as loan regulations tightened in the second half of the year, tenants who found it difficult to obtain jeonse loans began to prefer monthly rent listings, according to local real estate agents. A representative from a real estate agency in Mapo-gu said, "Jeonse prices have risen significantly, but loans are difficult to obtain and interest rates have increased, so the number of tenants looking for listings with monthly rent has increased."

As the shift to monthly rent strengthens, prices have gradually risen, and the proportion of high-priced monthly rents has expanded accordingly. Kyunghee Yeo, senior researcher at Real Estate R114, said, "It seems that the interests of landlords trying to reduce tax burdens and tenants wanting to live in good conditions have aligned," adding, "This phenomenon may strengthen further, especially in newly built apartments in prime locations."

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