This year, the volume of monthly rent transactions in the domestic dwelling leasing market has surpassed 1 million cases last month.
According to the Supreme Court's registration information platform on the 17th, among the dwelling leasing contracts that received a confirmed date across the country by July this year, those including monthly rent totaled 1,056,898.
Including guaranteed monthly rent, contracts with monthly rent have increased for five consecutive years, recording 761,507 cases in 2017, 784,369 in 2018, 820,270 in 2019, 887,887 in 2020, 977,286 in 2021, and 1,400,284 in 2022. For the first time since the relevant statistics were compiled in 2010, it surpassed 1 million cases. In 2023 and last year, it recorded 1,394,982 and 1,428,986 cases, respectively.
This year, the conversion to monthly rent in the dwelling leasing market has accelerated, with the volume of transactions increasing explosively. Based on January to July, nationwide monthly rent transactions were 843,078 in 2022, 838,773 in 2023, and 832,102 last year, all staying around 800,000 cases, but this year has already exceeded 1 million.
Leasing contracts are aggregated based on the tenant's confirmed date report without a set statutory deadline, and considering the recent upward trend in monthly rent transactions, the figures may increase further.
By region, the volume of monthly rent transactions has reached an all-time high not only in the metropolitan area, including Seoul (343,622 cases), Gyeonggi (292,205 cases), and Incheon (51,935 cases), but also in Busan (63,171 cases), Gyeongnam (4,256 cases), Chungnam (37,117 cases), and Daejeon (36,091 cases).
Nationwide, the proportion of contracts that include monthly rent recorded 40.7% in 2020, 42.5% in 2021, 51.0% in 2022, 55.0% in 2023, and 57.3% last year, marking the first time it entered the 60% range this year at 61.9%.
In contrast, the nationwide proportion of jeonse (Korean-style lease contracts for a lump sum deposit) was 59.3% in 2020, 57.5% in 2021, 49.0% in 2022, 45.0% in 2023, and 42.7% last year, showing a drop to the 30% range for the first time this year at 38.1%.
In Seoul, the proportions of monthly rent and jeonse are 64.1% and 35.9%, respectively, widening the gap. The surge in transactions involving monthly rent is attributed to the sharp increase in jeonse prices after the new leasing law centered on the contract renewal request system and the rent cap system was implemented at the end of July 2020.
In the metropolitan area, the trend of converting leasing contracts to monthly rent has been distinct, as the enforcement of the June 27 loan regulations sharply reduced the number of jeonse properties, accelerating the shift to monthly rent. This is because the limit for the 'jeonse return housing mortgage loan' (jeonse withdrawal fund loan), which landlords receive to return the jeonse deposit, has been cut from 200 million won to 100 million won, and it has been completely eliminated for multi-homeowners.
Moreover, the guarantee ratio for jeonse fund loans from organizations like the Korea Housing & Urban Guarantee Corporation (HUG) has been reduced to 80%, and commercial banks are either restricting or reducing jeonse loans.
The simultaneous rise in prices for jeonse and monthly rent is increasing the burden on tenants. According to the statistics from the Korea Real Estate Board (REB), the jeonse price index for apartments in Seoul rose from 91.3 in May 2023 to 100.6 in June, while the integrated monthly rent price index recorded a rising trend from 95.9 in July 2023 to 100.6 in June this year.