"Now that I'm in my 60s, it's hard to actively invest by taking a jeonse deposit like young people do, and it's better to receive monthly rent steadily. Quite a few people even asked first, while looking for a place, if it was okay to live on monthly rent."
A person in their 60s surnamed A, who recently signed a jeonse-to-monthly rent conversion contract in Yangcheon District, Seoul, said this. A said they decided to lower the jeonse deposit and instead receive close to 300,000 won more each month.
As jeonse rapidly shifts to monthly rent, both individuals and corporations are actively jumping into the "monthly rent" market. Individuals, who account for more than 90% of the domestic rental market, have expanded the monthly rent market from non-apartment types such as multi-family dwellings to apartments. Corporations, which had been rare in the rental market, are also quickly entering the rental housing market. As resistance to high monthly rent has eased due to jeonse fraud, tailored rental dwellings targeting a range of groups from young adults to seniors are being introduced.
◇ Lower the jeonse deposit and take monthly rent
In the individual landlord market, places where monthly rent could be collected were mainly in the non-apartment segment such as low-rise apartment and officetels. But recently, as listings for both jeonse and monthly rent have disappeared from the rental market, creating a "landlord's market," the shift to monthly rent in apartments is accelerating. With a shortage of jeonse listings, landlords are offering monthly rent terms, which are more favorable for revenue than jeonse.
Among all landlords of dwellings, older adults in their 60s and up account for a large share, and they take the jeonse deposit to repay loans or put it in the bank. Recently, however, as it has become harder to take out new loans and bank deposit rates are not high, monthly rent has become more profitable, leading them to prefer it. Even younger landlords, finding it difficult to secure new loans, sometimes opt to cover interest with monthly rent instead of paying down the principal.
Ham Young-jin, head of real estate research lab at Woori Bank, said, "From the landlord's perspective, even if you put the deposit in the bank, the one-year time deposit rate is about 2.9% to 3.0% annually, so they prefer to receive monthly rent," and noted, "Since the jeonse-to-monthly conversion rate is around 5%, it's much more advantageous."
In addition, as jeonse prices have soared, some tenants who cannot raise the deposit are seeking banjeonse (semi-monthly rent or semi-jeonse), which has combined to rapidly expand the monthly rent market. For new apartments, last year's June 27 lending curbs banned jeonse loans contingent on ownership transfer, which led landlords to prefer tenants without loans and further fueled the shift to monthly rent.
As a result, monthly rent transactions in lease contracts rose to 169,305 in January this year, up 38.4% in one year. The share of monthly rent transactions also accounted for 68.8% of all lease contracts. In particular, monthly rent transactions for apartments outpaced jeonse for the first time ever. The share of monthly rent transactions for apartments was 50.5% in January this year, higher than jeonse (49.5%).
The rate of converting jeonse to monthly rent hit a five-year high last year. In Seoul apartments last year, there were a total of 98,480 renewed jeonse or monthly rent contracts, of which 5,187 cases (5.26% of the total) were renewals that converted from jeonse to monthly rent. The average monthly rent for Seoul apartments also surpassed 1.5 million won for the first time this year. Last month, the average monthly rent for Seoul apartments was 1,515,000 won, up 12.5% from February last year (1,347,000 won).
In practice, the exclusive 59 square meters at Raemian One Bailey in Seocho District, Seoul, was leased last year on a jeonse deposit of 980 million won, but upon renewal, the lease terms changed to a 900 million won deposit plus 400,000 won in monthly rent. At Gunyung Apartment in Dongjak District, Seoul, the existing jeonse deposit (750 million won) was cut to 400 million won in exchange for a contract to receive 1.4 million won in monthly rent.
◇ "1 million won monthly rent? OK"… More corporate landlords as resistance to monthly rent eases
Corporations expect the monthly rent market to blossom in Korea and are entering the rental market. They are running "tailored rental businesses" for groups from young adults to seniors. There used to be strong resistance to monthly rents above 1 million won, but as demand has emerged to accept higher monthly rent in the wake of jeonse fraud, corporations are moving faster to enter the market. The corporate participation rate in the private rental market still remains below 10%, but expansion is rapid. According to the Korea Housing Institute (KHI), the market size of corporate-type private rental dwellings in Korea is currently about 12 trillion won in 2026, growing by roughly 300% in five years.
A representative corporate landlord is MGRV. Through "Mangrove," the company develops and operates rental dwellings that meet housing demand for one- to two-person households in city centers. Tenants can handle everything from contract to move-in at once through an application (app) without meeting the landlord directly. The company is currently finalizing construction-type rental dwelling projects and proceeding with development steps such as permitting and contractor selection in key areas of Seoul, including Yeongdeungpo, Seongdong, Jung and Dongdaemun districts. In particular, the company has formed a 500 billion won joint venture (JV) with the Canada Pension Plan Investment Board (CPPIB) and is accelerating the supply of rental dwellings.
In particular, MGRV is pushing not only rental dwellings focused on young adults but also rental dwellings for seniors. It is not stopping at providing living space, but is also creating programs that can offer housing culture and experiences.
Roca101 is also one of the corporate landlords. Roca101 converts old small buildings in the Seoul metropolitan area into dormitories for single-person households and provides them. The dormitory brand "Pixel House" of Roca101 operates 72 locations with 1,200 rooms. While it sometimes purchases buildings directly, it is expanding by remodeling vacancies and supporting operations through leases with owners of small buildings. Rents range from 650,000 won to 1.2 million won per month. With no management fees, it is favored by single young households, resulting in a low vacancy rate.
Foreign corporations are also stepping into the domestic rental market. Leading overseas companies, including U.S. investment bank Morgan Stanley, U.S. private equity firm KKR, U.K. asset manager ICG and global real estate investment firm Hines, are running rental dwelling businesses in the Seoul metropolitan area.