Monthly Rent Surpasses Jeonse Transactions... This Year, Monthly Rent Share of Small Apartments in Seoul Hits Record High

Record High Monthly Rental Transactions for Small Apartments in Seoul
1 in 5 Monthly Lease Contracts Exceeds 1 Million KRW Rent

From January to October this year, one out of every two lease contracts for small apartments in Seoul was a monthly rent contract. This is the first time that the proportion of monthly rent has surpassed that of Jeonse (a lump-sum deposit lease). Additionally, due to Jeonse fraud, demand for villa leases has shifted to small apartments, resulting in the highest-ever volume of Jeonse and monthly rent transactions.

On the 8th, 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 from January to October this year, the volume of Jeonse and monthly rent transactions for small apartments in Seoul (exclusive area of 60㎡ or less) totaled 114,962 cases. This is the highest transaction volume since the Ministry began compiling related statistics in 2011 (based on January to October data).

The volume of Jeonse and monthly rent transactions for small apartments in Seoul increased from 59,936 cases in 2018 to 79,128 cases in 2020, and continued to rise to 94,074 cases in 2021 and 110,202 cases in 2022.

The proportion of monthly rent also reached an all-time high. From January to October this year, the number of monthly rent transactions for small apartments in Seoul was 57,761, while Jeonse transactions were 57,201, resulting in a monthly rent proportion of 50.2%.

This is the first time that the share of monthly rent in the lease market has exceeded 50% based on January to October data. The monthly rent proportion has been on the rise, recording 33.4% in 2019, 36.5% in 2020, 46.5% in 2021, and 48.7% in 2022.

Among the 25 autonomous districts of Seoul, Geumcheon-gu has the highest proportion of monthly rent for small apartments. From January to October this year, out of 2,501 Jeonse and monthly rent transactions for small apartments in Geumcheon-gu, 907 were Jeonse and 1,594 were monthly rent, resulting in a monthly rent proportion of 63.7%.

Other districts where the monthly rent proportion exceeded 50% include △Guro-gu (61.3%), △Jung-gu (58.7%), △Gangnam-gu (58.0%), △Gangbuk-gu (57.9%), △Gwanak-gu (57.3%), △Mapo-gu (57.1%), △Songpa-gu (55.0%), △Jungnang-gu (53.3%), △Jongno-gu (52.8%), △Gangdong-gu (51.6%), △Seodaemun-gu (51.3%), and △Seocho-gu (50.3%), totaling 13 districts.

Seoul small apartment monthly rent and lease transaction volume and monthly rent ratio. (Provided by Economy Man Lab)

Transactions with monthly rent exceeding 1 million KRW also reached a record high. From January to October this year, there were 11,805 transactions of small apartments in Seoul with monthly rent over 1 million KRW. This means that one out of every five monthly rent transactions involved rent exceeding 1 million KRW.

Looking at the proportion of monthly rent by apartment size in Seoul, it was 30.5% for exclusive areas over 60㎡ up to 85㎡, 32.1% for over 85㎡ up to 102㎡, 32.9% for over 102㎡ up to 135㎡, and 36.0% for over 135㎡.

Hwang Hansol, a research fellow at Economic Man Lab, said, "Due to Jeonse fraud, villa demanders are entering the small apartment lease market, increasing transaction volume and the proportion of monthly rent. This could lead to polarization in the Jeonse market between apartments and villas."

Meanwhile, from January to October, the volume of Jeonse transactions for villas (row houses and multi-family houses) in Seoul was 57,718, a 24.3% decrease compared to the previous year (76,317 cases).

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