As Seoul apartment jeonse and monthly rent prices were strong this year, it was found that half of tenants who renewed their contracts used the right to request contract renewal.
An analysis of Seoul apartment jeonse and monthly rent transaction records reported to the Ministry of Land, Infrastructure and Transport's actual transaction price system on the 28th showed that the share of renewal contracts this year was 41.7%, more than 10 percentage points (p) higher than last year's 31.4%.
As jeonse prices rose, more tenants chose to renew rather than sign new contracts. In particular, the share of those who used the right to request contract renewal grew from 32.6% last year to 49.3% this year.
About half of the tenants who chose renewal contracts used the renewal right to keep the increase in jeonse or monthly rent to 5% or less.
The share of renewal-right use for Seoul apartments shrank to the 30% range in 2023 due to a deepening reverse jeonse crunch, but turned upward again in the second half of last year as jeonse prices rose.
This year, monthly rent rose more noticeably than jeonse. According to housing price trend statistics from the Korea Real Estate Board (REB), Seoul apartment monthly rent (deposit-based monthly rent) prices rose a cumulative 3.29% from January to November this year. That outpaced the jeonse price increase of 3.06% over the same period.
Last year, jeonse rose 5.23% and monthly rent 2.86%, respectively. However, the larger increase in monthly rent this year was due to stronger regulations on jeonse loans, such as the Oct. 15 measures, which boosted demand to convert deposits into monthly rent.
It also appears that the designation of all of Seoul as a land transaction permit zone and a regulated area increased rental demand amid a slump in the apartment sales market.