Seoul Metropolitan Area Monthly Rent Transactions: Apartment Share Decreases, Townhouses and Multi-family Houses Increase

This year, in the rental market of the Seoul metropolitan area, the proportion of monthly rent for apartments has decreased as demand for jeonse (long-term lease) increased. On the other hand, for multi-family and row houses, the proportion of monthly rent has risen due to concerns over jeonse fraud and "empty jeonse" risks.

[Image source=Yonhap News]

According to an analysis of actual transaction data from the Ministry of Land, Infrastructure and Transport by Real Estate R114 on the 15th, a total of 309,518 apartment transactions were contracted in the Seoul metropolitan area from January this year to the 12th of this month. Among these, 125,067 were monthly rent contracts, accounting for 40.4% of the total. Compared to the second half of last year, when monthly rent preference was prominent due to rising interest rate burdens at 45.2%, the proportion of monthly rent transactions has slightly decreased.

In contrast, the monthly rent ratio for multi-family and row houses has been on the rise, recording 37.6% in the first half of 2022, 41.0% in the second half, and 46.2% in the first half of this year. Especially in areas such as Guro, Geumcheon, and Jung-gu in Seoul, and Deogyang-gu in Goyang-si, Paju-si in Gyeonggi, and Dong-gu in Incheon, the proportion of monthly rent transactions for multi-family and row houses in the first half of this year increased by more than 10 percentage points compared to the previous half-year. It appears that demand for monthly rent contracts with deposits lowered to a safe level has increased, centered on regions where concerns over jeonse fraud and empty jeonse have grown.

[Image provided by Budongsan R114]

In the apartment market of the Seoul metropolitan area, as more tenants return to jeonse, the monthly rent transaction prices have decreased compared to the second half of last year. According to Real Estate R114, the converted deposit amount for monthly rent in the first half of this year was 311.57 million KRW, down 12.1% from 354.35 million KRW in the second half of last year. By region, Seoul fell by 12.5% (from 519.21 million KRW to 454.15 million KRW), Incheon by 11.7% (from 203.76 million KRW to 179.94 million KRW), and Gyeonggi by 11.5% (from 265.87 million KRW to 235.28 million KRW).

Ye Kyung-hee, senior researcher at Real Estate R114, said, "Although monthly rent transaction prices for apartments in the Seoul metropolitan area have decreased this year, the room for further decline appears limited," adding, "The decline in jeonse prices, which serve as the basis for monthly rent price calculation, has slowed, and monthly rent prices are expected to be defended as transactions occur at prices higher than the previous period."

However, she added, "In non-apartment types such as villas, and in areas with a large supply of new housing or high risk of reverse jeonse, low-priced monthly rent transactions are expected to continue."

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