As the shift from jeonse to monthly rent accelerates, the apartment monthly rent growth rate in the greater Seoul area hit the highest level since then since statistics began in 2016.
On Oct. 28, Realhouse, a real estate research firm, compiled KB Kookmin Bank's monthly time-series data and found that the apartment monthly rent growth rate in the greater Seoul area reached 6.27% from January to September this year.
By region, Seoul was 7.25%, Gyeonggi was 5.23%, and Incheon was 7.8%.
Looking at the apartment monthly rent growth rate in the greater Seoul area by year, it showed only slight fluctuations from 2016 to 2019. Beginning in 2020, as the three lease laws took effect, the increase began to widen. After a 1% rise in 2020, it steadily maintained growth in the 4–5% range at 4.26% in 2021, 5.54% in 2022, 5.25% in 2023, and 4.09% in 2024.
While apartment monthly rents continued to rise, jeonse prices showed ups and downs. They fell 0.17% in 2018 and 1.04% in 2019. They then rose 10.38% in 2021 and 0.04% in 2022, before dropping 6.66% in 2023. They also climbed 4.09% last year, but this year have risen only 1.23%.
The monthly rent market is also steadily expanding. As securing jeonse funds has become harder due to tighter lending regulations under the government's June 27 measures, more tenants are choosing guaranteed monthly rent (banjeonse).
According to the Ministry of Land, Infrastructure and Transport, the nationwide share of dwellings on monthly rent reached 62.2% from January to August this year, surpassing 60% for the first time. In particular, in Seoul, where jeonse deposits are large, the share of monthly rent transactions exceeded the national average. In Seoul, the cumulative share of monthly rent for all dwellings from January to August this year was 64.1%. The share also grew this year, following 56.6% in 2023 and 60% last year.
After the Oct. 15 measures, as jeonse and monthly rent prices rise and the share of monthly rent is expected to expand quickly, market anxiety is also growing. This is due to concerns that the number of tenants pushed into banjeonse by the June 27 lending regulations has increased, and that rental supply will contract as a two-year owner-occupancy requirement is added within land transaction permit zones under the Oct. 15 measures.
Kim Seon-a, head of Realhouse's sales analysis team, said, "Because of the regulations, it is becoming harder to take out loans for jeonse deposits, and with mandatory owner-occupancy requirements, rental listings will decrease further, forcing more tenants into monthly rent," adding, "Government policies are expected to inflict the greatest harm on housing-vulnerable people."