"Anxious About Jeonse Living"...Record High Number of Small Officetels with Monthly Rent Over 1 Million Won

The number of small officetel transactions in Seoul with monthly rents exceeding 1 million won surpassed 2,000 for the first time, setting a record high. This is interpreted as a result of a growing preference for monthly rent amid increasing concerns over the return of jeonse deposits.

A view of an officetel in downtown Seoul.
Photo by Yonhap News

On the 12th, Economic Man Lab, a real estate information provider, analyzed the Ministry of Land, Infrastructure and Transport's actual transaction price disclosure system and found that among 19,169 monthly rent transactions for small officetels with exclusive areas of 60㎡ or less in Seoul during the first half of this year, 2,032 transactions had monthly rents exceeding 1 million won. This is the highest number of transactions since the Ministry began compiling related statistics in 2011 (based on the first half of the year).

Transactions for small officetels in Seoul with monthly rents over 1 million won were only 346 in the first half of 2019 but surged to 1,135 last year, surpassing 1,000 for the first time. This year’s first half saw 2,032 transactions, more than doubling compared to last year, and about four times the 590 transactions recorded in 2021.

The proportion of transactions with monthly rents over 1 million won among all small officetel transactions also increased. This proportion rose slightly from 3.5% in the first half of 2020 to 4.2% in 2021 and 5.8% in 2022, but soared to 10.6% this year, marking the highest level since the statistics began.

By the 25 autonomous districts of Seoul, Songpa-gu recorded the highest number of small officetel transactions with monthly rents over 1 million won at 313. This was followed by Yeongdeungpo-gu with 304, Gangnam-gu with 272, Seocho-gu with 173, Gangseo-gu with 148, Mapo-gu with 118, and Dongdaemun-gu with 117.

The small officetel with the highest monthly rent in the first half of this year was ‘Classian Ivy’ located in Singil-dong, Yeongdeungpo-gu, Seoul, with an exclusive area of 41.05㎡. On April 5, a monthly rent contract was signed with a jeonse deposit of 10 million won and a monthly rent of 3.5 million won. Next, ‘Signity Yeouido’ in Yeouido-dong, Yeongdeungpo-gu, Seoul, with an area of 45.23㎡, had a monthly rent contract on June 9 with a jeonse deposit of 70 million won and a monthly rent of 3 million won. ‘Hangang The Chaeum’ in Dangsan-dong, Yeongdeungpo-gu, with 57.69㎡, was also transacted on March 27 with a jeonse deposit of 50 million won and a monthly rent of 2.7 million won.

This trend is attributed to the growing anxiety that jeonse deposits may not be returned, leading to a stronger preference for monthly rent. Hwang Hansol, a research fellow at Economic Man Lab, explained, “As demand arises for safer monthly rent options to avoid situations where jeonse deposits, which are equivalent to one’s entire assets, are not returned, high-priced monthly rent contracts are also increasing accordingly.”

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