One of Two Tenants Moves to a New Home... "No Renewal Rights Used as Jeonse Prices Fall"

This year, in the Seoul apartment jeonse market, one out of every two tenants signed a new contract by moving to a new home. New contracts, where tenants chose to find a new home instead of using the right to request contract renewal amid falling jeonse prices, increased by about 30%, while renewals sharply decreased.

On the 9th, Station3, the operator of the real estate information platform Dabang, announced that based on the Ministry of Land, Infrastructure and Transport's actual transaction price disclosure system, it analyzed 84,372 jeonse transactions of Seoul apartments from January to July this year. Compared to the same period last year, new contracts increased by 29.7%, while renewals (extensions + renewals) decreased by 27.7%.

In terms of numbers, new contracts rose from 36,184 to 46,946, an increase of 10,762. This means that more than one out of every two jeonse transactions was a new contract. Renewals decreased from 51,798 to 37,426, a drop of 14,372.

Among renewals, the proportion of renewal contracts notably declined. From January to July last year, renewal contracts numbered 35,499, accounting for 40.3% of all jeonse transactions, but this year, they fell to 24,409, or 28.9%. For extension contracts, which continue under the same conditions, the number decreased from 16,299 (18.5%) to 13,017 (15.4%) during the same period.

The share of renewal contracts using the right to request contract renewal also plummeted to about one-third. From January to July last year, there were 25,542 such cases, nearly 30% of all Seoul apartment jeonse transactions, but this year, only 8,833 cases were recorded, accounting for just 10.5%.

Dabang analyzed that as jeonse deposits declined, tenants appeared to choose moving to a new home rather than changing conditions to continue living in their existing homes. During this period, the average jeonse deposit for Seoul apartments was 506.2 million KRW, down 34.55 million KRW (6.5%) from the average of 535.17 million KRW in January to July last year.

Jang Junhyuk, Marketing Director at Dabang, explained, "We confirmed that the decline in jeonse deposits caused by reverse jeonse difficulties and interest rate hikes also affects the types of jeonse transactions tenants engage in. During periods of falling jeonse prices, the right to request contract renewal, which aims to prevent sudden jeonse price hikes and protect tenants, appears to lose its effectiveness."

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