[Edaily Reporter LEE DAWON ] The shift toward monthly rent is becoming increasingly pronounced in Seoul’s residential rental market. Following the proportion of monthly rent contracts among Seoul apartment leases exceeding 50 percent for the first time this year, the monthly rent price index for townhouses and multi-family homes has reached its highest level since records began. As jeonse (lump-sum deposit) transactions decline, the burden of monthly rent is expected to increase for both apartments and townhouses.

According to data from the Seoul Real Estate Information Plaza on the 21st, there were a total of 172,027 jeonse and monthly rent transactions for apartments in Seoul from January through September of this year, of which 87,740 were monthly rent contracts. This accounted for 51.0% of all jeonse and monthly rent transactions. Jeonse contracts totaled 84,287, which was 3,453 fewer than monthly rent contracts.

During the same period last year, jeonse transactions totaled 116,272, significantly outpacing monthly rent transactions (90,310). The share of monthly rent transactions, which stood at 43.7% at that time, rose by 7.3 percentage points this year, overtaking the jeonse share.

This is due to the relatively sharper decline in jeonse transactions compared to monthly rent transactions. From January through September of this year, the number of jeonse contracts fell by 27.5% compared to the same period last year—a decline roughly 10 times steeper than that of monthly rent contracts (-2.8%).

If this trend continues through the end of the year, the share of monthly rent transactions for Seoul apartments could exceed 50% on an annual basis for the first time. Since 2011—when the Seoul Real Estate Information Plaza began providing statistics—there has never been a year in which the share of monthly rent transactions exceeded 50%. The highest annual share of monthly rent transactions to date was 44.5% last year.

From January through September of this year, monthly rent exceeded jeonse in 13 of Seoul’s 25 autonomous districts. While only four districts—Geumcheon, Jongno, Jung, and Guro—showed this trend during the same period last year, nine additional districts—Gangnam, Gangbuk, Gwanak, Gwangjin, Dongdaemun, Mapo, Yeongdeungpo, Yongsan, and Jungnang—have joined the list this year.

By district, Jongno-gu had the highest proportion of monthly rent at 65.6%, followed by Jungnang-gu (64.9%), Guro-gu (63.1%), Jung-gu (59.6%), and Geumcheon-gu (58.7%). In Yongsan District (56.9%), Dongdaemun District (56.7%), Gwanak District (56.1%), Mapo District (54.1%), and Gangnam District (54.0%), monthly rent contracts also accounted for more than half of all lease transactions.

In particular, the proportion of monthly rent contracts in Jungnang-gu jumped by 20.3 percentage points, from 44.6% last year to 64.9% this year, marking the largest increase among Seoul’s autonomous districts. Monthly rent transactions in this area rose by 91.6%, from 2,166 to 4,151, while jeonse transactions fell by 16.5%, from 2,687 to 2,244. In Gangnam District as well, monthly rent contracts (8,406) outnumbered jeonse contracts (7,170).

In contrast, Yangcheon District had the lowest proportion of monthly rent transactions in Seoul at 42.1%, while Seongbuk and Dobong Districts (44.7% each), Gangseo District (45.6%), and Dongjak District (46.0%) still saw more jeonse transactions.

As the rental market shifts toward monthly rent, the financial burden on tenants is also increasing. According to the Korea Real Estate Board’s National Housing Price Trends Survey, the average monthly rent for apartments in Seoul last September was 1,661,000 won. This represents an increase of 218,000 won compared to September of last year (1,443,000 won). During the same period, the median monthly rent also rose from 1.2 million won to 1.4 million won.

Monthly Rent Index for Row Houses and Multi-Family Homes Hits All-Time High… Increase in Leases Exceeding 1 Million Won per Month

The trend of rising monthly rents is evident not only in apartments but also in

row

houses and multi-family homes, where housing costs are relatively lower. According to the “September National Housing Price Trend Survey” released by the Korea Real Estate Board, the monthly rent price index for townhouses and multi-family homes in Seoul stood at 101.6, marking the highest level since the statistic was first compiled in June 2015.

The average monthly rent for townhouses and multi-family homes in Seoul also reached a record high of 680,000 won. The southeastern region, which includes Seocho, Gangnam, Songpa, and Gangdong Districts, averaged 950,000 won, approaching the 1 million won mark, while the downtown area—comprising Jongno, Yongsan, and Jung Districts—had an average monthly rent of 870,000 won.

High-rent leases are also on the rise. From January of this year through today, out of 68,101 monthly rent contracts for townhouses and multi-family homes in Seoul, 8,723 transactions—accounting for 12.8% of the total—had monthly rents exceeding 1 million won.

Villa leases with monthly rents exceeding 1 million won have also been confirmed in the outskirts of Seoul. On the 19th, a multi-family home with an exclusive area of 18.91 square meters in Hwagok-dong, Gangseo-gu, was leased with a security deposit of 20 million won and a monthly rent of 1.1 million won; last month, a new lease was signed for a multi-family home with an exclusive area of 18.3 square meters in Deungchon-dong, Gangseo-gu, with a security deposit of 20 million won and a monthly rent of 1.4 million won.

Reasons cited for the increase in the share of monthly rent in the Seoul housing market include regulations on jeonse loans, a shortage of rental housing supply, and existing tenants renewing their leases.

According to the “KB Housing Market Review” published by the KB Financial Group Management Research Institute, the shortage of jeonse listings persists as the supply of new apartments decreases and contract renewals by existing tenants increase. The rise in landlords moving into their rental properties for personal use following tax reforms is another factor constraining jeonse supply. Consequently, last month’s jeonse supply-demand index reached its highest level since the introduction of the Three Lease Laws in 2020.

Rising apartment rents are another factor that could affect the villa rental market. Last month, the average jeonse price for apartments in Seoul reached 641 million won, while the average monthly rent stood at around 1.66 million won.

A decline in the supply of row houses and multi-family homes could also contribute to upward pressure on rents. The annual number of completed row houses, multi-family homes, and multi-unit dwellings in Seoul fell from approximately 22,000 units in 2022 to 4,858 units last year.