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 every month. While finding tenants, quite a few people even asked first 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-gu, Seoul, said this. A said they would lower the jeonse deposit and instead receive nearly 300,000 won more every month.
As jeonse shifts rapidly 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 dwellings market. As resistance to high monthly rents has eased due to jeonse fraud and other issues, they are unveiling customized rental dwellings targeting a wide range of groups from youth to seniors.
◇ Lower the jeonse deposit and collect monthly rent
In the market where individuals lease out homes, places that could command monthly rent were mainly the non-apartment segment such as low-rise apartment and officetels. However, as jeonse and monthly rent listings have disappeared from the rental market recently, creating a "landlord's market," apartments too are accelerating their shift to monthly rent. With jeonse listings scarce, landlords are offering monthly rent terms that are more profitable than jeonse.
Older adults aged 60 and above account for a large share of all rental business owners in dwellings, and they take jeonse deposits to repay loans or put them in the bank. But with new borrowing getting harder lately and bank deposit rates not high, receiving monthly rent is actually more profitable in terms of revenue, so they prefer it. Even younger landlords, facing difficulties in obtaining new loans, sometimes opt to cover interest with monthly rent instead of repaying principal.
Ham Young-jin, head of the real estate research lab at Woori Bank, said, "From a landlord's perspective, even if you put the deposit in the bank, the one-year time deposit rate is around 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 favorable."
Also, as jeonse prices have soared, a trend of tenants seeking semi-monthly rent (quasi-monthly or quasi-jeonse) because they cannot raise the jeonse deposit has intersected, rapidly growing the monthly rent market. For new apartments, last year's June 27 lending curbs banned jeonse loans conditional on transfer of ownership, 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 reached 169,305 in January this year, up 38.4% in one year. The share of monthly rent transaction volume also accounted for 68.8% of all rental contracts. In particular, apartment monthly rent transactions surpassed jeonse for the first time ever. The share of apartment monthly rent transactions 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 jeonse/monthly lease renewal contracts, and 5,187 of them (5.26% of the total) renewed by converting from jeonse to monthly rent. The average monthly rent for Seoul apartments also exceeded 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, a 59-square-meter exclusive unit at Raemian One Bailey in Seocho-gu, Seoul, signed a lease last year with a jeonse deposit of 980 million won, but upon renewing the contract, the terms were changed to a 900 million won deposit plus 400,000 won in monthly rent. At Guneong Apartments in Dongjak-gu, Seoul, a contract was signed to cut the existing jeonse deposit (750 million won) to 400 million won in exchange for 1.4 million won in monthly rent.
◇ "1 million won monthly rent? OK"… more corporate landlords as aversion to monthly rent eases
Corporations expect the monthly rent market to blossom in Korea and are entering the rental market. They are running "customized rental businesses" for everyone from youth to seniors. There used to be strong resistance to monthly rents over 1 million won, but as demand has emerged lately to tolerate higher monthly rents due to jeonse fraud and other issues, corporations are accelerating their market entry. In the private rental market, corporations still account for less than 10%, but expansion is rapid. According to the Korea Housing Institute, the domestic corporate private rental dwellings market is currently about 12 trillion won in 2026, growing roughly 300% in five years.
A representative corporate landlord is MGRV. The company develops and operates rental dwellings that meet 1- to 2-person urban housing demand through "Mangrove." Tenants can handle everything from contract to move-in at once through an application (app) without meeting the landlord directly. It is currently finalizing construction-type rental dwellings projects and proceeding with development procedures such as permits and selecting construction companies in major Seoul districts including Yeongdeungpo-gu, Seongdong-gu, Jung-gu, and Dongdaemun-gu. In particular, the company has formed a 500 billion won joint venture (JV) with CPPIB and is speeding up the supply of rental dwellings.
In particular, MGRV is pursuing rental dwellings not only focused on the young demographic but also for seniors. It is creating programs that not only provide living space but also offer residential culture and experiences.
Roka101 is also one of the corporate landlords. Roka101 converts aging small buildings in the Seoul metropolitan area into dormitories for single-person households and provides them as dwellings. Roka101's dormitory brand "Pixel House" operates 72 locations with 1,200 rooms. While it sometimes purchases buildings directly, it is expanding by supporting owners of small buildings to operate Pixel House themselves. Rent ranges from 650,000 won to 1.2 million won per month. With no maintenance fees, preference among single young households is high and vacancy rates are low.
Foreign corporations are also stepping into the domestic rental market. Leading overseas companies such as 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 dwellings businesses in the Seoul metropolitan area.