Last Year Seoul Officetels, Record High Number of 'Pure Monthly Rent' Transactions

[Asia Economy Reporter Kim Hyemin] In the Seoul officetel market, transactions of 'pure monthly rent,' where the deposit is less than one year's worth of monthly rent, are increasing.

On the 8th, Real Estate R114 analyzed actual transaction data from the Ministry of Land, Infrastructure and Transport and found that last year, there were a total of 25,607 officetel monthly rent transactions in Seoul, of which 5,355 were pure monthly rent. The proportion was 20.9%, the highest since data collection began in 2011. In 2011, the share of pure monthly rent transactions was around 10%, but both the number of transactions and the proportion have steadily increased since then.

On the other hand, the share of 'semi-monthly rent' transactions, where the deposit is equivalent to 12 to 240 months of rent, was 69.4% (17,778 transactions), falling below the 70% mark for the first time. The share of 'semi-jeonse' transactions, where the deposit exceeds 240 months of rent, also decreased from 11% (2,863 transactions) in 2020 to 9.7% (2,474 transactions) last year.

Senior Researcher Yeokyung Hee said, "This is due to the increase in demand from young office workers and one- to two-person households, who are the main tenants." She added, "Young tenants are likely to choose pure monthly rent because it is difficult for them to prepare a large sum of money as a deposit." She further noted, "Considering that officetels are income-generating real estate aimed at rental income and that monthly rent suppliers want rental yields above loan interest rates, pure monthly rent transactions are likely to increase further."

The problem is that pure monthly rent offers a poorer living environment compared to other types of monthly rent. Tenants living in Seoul officetels under pure monthly rent tend to have relatively smaller living areas than those under semi-monthly rent or semi-jeonse.

Looking at the average exclusive residential area of officetels rented monthly in Seoul last year, it was ▲24.3㎡ for pure monthly rent ▲25㎡ for semi-monthly rent ▲29㎡ for semi-jeonse. Senior Researcher Ye said, "The larger the living area, the higher the rental price, but since pure monthly rent involves a higher monthly rent burden compared to other types, tenants seem to choose smaller areas." She added, "The high monthly rent burden lowers tenants' quality of living and hinders asset formation, so it is necessary to actively expand monthly rent deductions and support low-interest policy funds."

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