In the first quarter of this year, the proportion of monthly rent in Seoul dwellings reached 65%, marking a record high for quarterly figures. The impact of jeonse scams and rising jeonse prices are increasing the proportion of transitions from jeonse to monthly rent, and the speed of this transition is also accelerating.
According to the Supreme Court's registration information portal on the 28th, among a total of 233,958 dwellings rental contracts with a confirmed date from January to March this year in Seoul, there were 62,899 monthly rent contracts. The proportion of monthly rent contracts accounted for 64.6% of the total.
This means that more than 6.4 out of every 10 rental contracts in Seoul are monthly rent or guarantee-based monthly rent contracts.
This is the highest quarterly figure since the Supreme Court began compiling confirmed date information in 2014.
The speed of transitioning from jeonse to monthly rent in Seoul is accelerating. The proportion of monthly rent in Seoul dwellings was only around 40% on average until 2021. However, with the emergence of reverse-jeonse crises and jeonse scams as societal issues in 2022 and 2023, this figure rose to 53% and 56%, respectively. Last year, it soared to an average of 60.3%.
Quarterly, it rose from 59.1% in the second quarter of last year to 60.3% in the third quarter and 61.2% in the fourth quarter. In the first quarter of this year, the proportion approached 65%.
The acceleration of converting to monthly rent in Seoul is attributed to the stabilization following the severe reverse-jeonse crisis experienced 2 to 3 years ago, coupled with concerns over a supply shortage resulting in the continued rise in jeonse prices for over a year.
The Bank of Korea's interest rate cuts and delays in reducing bank loan rates are also believed to have contributed to the increasing cases of converting raised deposits into monthly rent.
The real estate industry expects the trend of converting jeonse to monthly rent will continue alongside changes in the rental market.