"Villa Risks Jeonse Fraud"…Will Apartment Transactions Surpass Jeonse and Monthly Rent Deals in Seoul?

Villa-Apartment Transaction Volume Gap, 8,354 Cases → 896 Cases
Impact of Avoiding Multi-family and Row House Lease Transactions

[Asia Economy Reporter Kim Hyemin] The gap in transaction volumes between apartments and villas in Seoul's monthly rent and lease market is rapidly narrowing. This is due to a villa avoidance phenomenon following the aftermath of jeonse fraud damage. If this trend continues, it is highly likely that apartment transaction volumes will surpass those of villas.

According to the Seoul Real Estate Information Plaza on the 14th, in December last year, the monthly rent and lease transaction volume in Seoul was 18,450 cases for apartments and 19,346 cases for villas (detached, multi-family, and row houses). The transaction volume gap was only 896 cases.

Until February last year, villa transaction volume was 30,153 cases, and apartments were 21,799 cases, with a transaction volume gap of 8,354 cases. However, it decreased to 4,522 cases in August, dropped to 2,439 cases in November, and sharply declined to below 1,000 cases in December. While villa transaction volume fell from the 30,000 range to the late 10,000 range, decreasing by 10,807 cases, apartment transaction volume only decreased by 3,349 cases.

Looking at the transaction volumes for January and February this year, which have not yet been fully tallied, the narrowed gap is even more apparent. As of the previous day, villa transaction volume in January was 14,722 cases, and apartment transaction volume was 14,434 cases, reducing the gap to 288 cases. In February, transaction volumes were 3,759 and 4,009 cases respectively, with apartments leading in monthly rent and lease transactions.

Until now, monthly rent and lease transactions were higher for villas than apartments. This is because many people, especially young workers and single-person households, sought relatively affordable villas. In particular, there was a strong preference for jeonse, where the deposit can be refunded. However, as jeonse fraud became a social issue mainly centered on villas, the situation reversed. With growing anxiety about losing deposits, preference shifted from villas to apartments and from jeonse to monthly rent.

In fact, as of December last year, the jeonse price ratio in Seoul was 62.3% for apartments and 78.6% for villas. For apartments, the district with the highest jeonse price ratio was Gwanak-gu at 76.7%, but for villas, there were nine districts (Gangbuk, Gangseo, Gwanak, Geumcheon, Dobong, Dongjak, Yangcheon, Eunpyeong, Jungnang-gu) where the ratio exceeded 80%, raising concerns about "empty jeonse" risks. Particularly, Seodaemun-gu had a jeonse price ratio reaching 95%.

The sharp decline in villa monthly rent and lease transaction volume over the past year is largely due to a steep drop in jeonse transactions centered on row houses and multi-family housing types. Jeonse transactions for row houses and multi-family homes dropped sharply from 7,316 cases in February last year to 4,391 cases in December. Meanwhile, monthly rent transactions only decreased slightly from 4,845 to 4,173 cases during the same period.

Yeokyunghee, Senior Researcher at Real Estate R114, said, "Concerns about empty jeonse due to falling house prices combined with jeonse fraud have increased distrust in villa jeonse, so transaction volumes may decrease further in the future."

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