Is Monthly Rent Becoming the Main Trend... 5 Consecutive Months of Jeonse < Monthly Rent

Last Month's Lease Transactions Share
Monthly Rent 52.87%, Exceeding Half Again
Seoul Up 5.21 Percentage Points Year-on-Year
Jeonse Loan Burden Due to Interest Rate Hikes

[Asia Economy Reporter Hwang Seoyul] The trend of monthly rent demand surpassing jeonse (long-term lease) has continued for five consecutive months, solidifying the shift from jeonse to monthly rent as the prevailing norm. Compared to last year, the proportion of monthly rent transactions in the total nationwide jeonse and monthly rent deals has increased.

According to the Court Registry Information Plaza on the 8th, as of the 6th, the number of monthly rent contracts nationwide with confirmed dates last month was 119,536, while jeonse contracts were 106,553. This means that 52.87% of lease transactions were monthly rent. The confirmed date is based on those issued by the registry office and community centers.

The phenomenon of monthly rent exceeding jeonse has continued for five consecutive months since April this year. From January (45.96%) to March (49.58%), the share of monthly rent gradually increased, reaching 50.08% in April, marking the first time it surpassed half. Subsequently, it was 57.78% in May, 50.27% in June, 50.40% in July, and monthly rent dominance has continued steadily through August.

When comparing last month's figures by region nationwide with the same month last year, all areas showed an increase in the proportion of monthly rent. In particular, △Chungnam (19.02 percentage points) △Jeonnam (17.25 percentage points) △Gyeongbuk (12.46 percentage points) △Jeju (11.56 percentage points) △Sejong (11.46 percentage points) △Ulsan (11 percentage points) △Daejeon (10.51 percentage points) saw increases exceeding 10 percentage points this year. In the metropolitan area, Seoul increased by 5.21 percentage points, Gyeonggi by 6.8 percentage points, and Incheon by 8.15 percentage points.

With four interest rate hikes this year alone (currently 2.50%), the burden of jeonse loan repayments has increased, leading more tenants to inevitably choose monthly rent over jeonse. According to the Korea Real Estate Agency’s nationwide comprehensive housing (apartments, detached houses, row houses, etc.) jeonse supply-demand trend, the index hit a low of 95.1 in July, the lowest this year. Meanwhile, the monthly rent supply-demand index, although lower than its peak of 107.5 in September last year, has consistently remained above 100 since March this year. The supply-demand index ranges from 0 to 200, where values closer to 0 indicate more supply, and values closer to 200 indicate higher demand. This means the jeonse market is supply-dominant, while the monthly rent market is demand-dominant.

Experts expect the trend of jeonse converting to monthly rent to continue in the second half of the year. Professor Seo Jin-hyung of Gyeongin Women’s University (co-representative of the Fair Housing Forum) said, "With jeonse prices rising and loan restrictions in place, the trend of converting the increased jeonse deposit into monthly rent with a deposit guarantee is continuing. As property taxes increase, landlords are also supplying monthly rent to secure cash, so the shift to monthly rent will continue going forward."

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