[Exclusive] Is a Jeonse Crisis Coming in the Second Half of the Year? 15,000 Households Facing Renewal Expiry Surge

Expiring One After Another Starting This August

[Image source=Yonhap News]

[Asia Economy Reporter Kim Hyemin] A predicted crisis is approaching in the housing rental market. Starting from August, households that have fully used their lease renewal rights will sequentially enter the market. It is estimated that at least 15,000 households in Seoul alone will face the reality of the sharply increased rental prices over the past two years this year.

According to data received by the office of Kim Sang-hoon, a member of the People Power Party, from the Ministry of Land, Infrastructure and Transport on the 12th, the number of households that renewed apartment lease contracts in Seoul from August to December 2020, two years ago, totaled 14,284. Considering that the renewal contracts tend to be undercounted due to a lower rate of fixed-date registration compared to new contracts, the actual number is expected to be even higher.

The government implemented the two lease laws (Lease Renewal Right and Rent Cap System) from August 2020 to enhance tenants' housing stability. Unless there are special reasons, tenants who request it can limit rent increases to within 5% and extend their residence for another two years.

The problem is that starting this August, two years later, the residence periods of tenants who used their renewal rights will begin to expire one after another. Including these tenants, the number of households with expiring renewal contracts reaches 2,366 in August alone. The scale gradually increases, reaching 3,424 households in December. This means that the demand entering the rental market due to expiring renewal contracts from August to December averages about 3,000 households per month. This accounts for nearly 30% of the apartment lease transactions in Seoul at that time.

While the demand for rental housing entering the market is increasing, supply remains stagnant. According to Apartment Real Transaction Price (Asil), the number of apartment lease listings in Seoul has remained at around 25,000 to 26,000 since last month. This is about a 20% decrease compared to March, during the presidential election period.

Kim Deok-rye, head of policy research at the Korea Research Institute for Housing and Urban Affairs, said, "Every time these households come out sequentially, even the quiet rental market will be stimulated," adding, "The new government must first consider ways to reduce their burden and prevent instability in the rental market."

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