Nearly 1 in 10 Seoul apartment rentals now cost 3 million won a month

Seoul's rental market is rapidly shifting away from jeonse — the lump-sum deposit system — toward monthly rent, as a shortage of jeonse listings deepens. In the city's apartment wolse market, contracts carrying monthly rents of 1 million won ($730) or more now account for nearly half of all deals, while those at 3 million won or above are closing in on double digits.

According to the Ministry of Land, Infrastructure and Transport's actual transaction price system, 26,852 new wolse contracts were signed for Seoul apartments from Jan. 1 through June 4. Of those, 13,225 — or 49.2 percent — carried monthly rents of 1 million won or more. Over the same period last year, high-end contracts of 1 million won or above made up 45.4 percent of the total 29,579 deals, meaning the share has risen 3.8 percentage points this year.

Contracts at 3 million won or more also increased. This year, 2,541 Seoul apartment wolse deals — 9.4 percent of the total — fell into that category, up 2.1 percentage points from 7.3 percent, or 2,188 contracts, during the same period last year.

The shift from jeonse to monthly rent is accelerating in Seoul's lease market, and monthly rents are climbing steeply at the same time. Tighter owner-occupancy requirements have reduced the supply of jeonse listings, pushing more tenants toward wolse as a result. The lingering effects of jeonse fraud have compounded the trend, with both landlords and tenants increasingly preferring monthly rent arrangements.

The Ministry of Land, Infrastructure and Transport's April housing statistics show that the monthly rent transaction share in Seoul reached 70 percent from January through April, up 6.4 percentage points from 63.6 percent a year earlier. Rents themselves are also rising: the Korea Real Estate Board put the average monthly rent for Seoul housing at 1,246,000 won in April, a 7.8 percent increase from 1,155,000 won in the same month last year.

High-end monthly rents are spreading to Seoul's outer districts in tandem with rising home prices. On May 9, an 84-square-meter unit on the eighth floor of Hanwha Forena Mia in Mia-dong, Gangbuk-gu changed hands at a deposit of 50 million won ($36,500) and a monthly rent of 3.1 million won ($2,260).

In March, an 84-square-meter unit on the 25th floor of Nowon Lotte Castle Signature in Sanggye-dong, Nowon-gu was leased for a deposit of 150 million won ($109,500) and a monthly rent of 3 million won ($2,190). That same month, an 84-square-meter unit on the 18th floor of e-Convenient World Seoul National University Entrance 2 complex in Bongcheon-dong, Gwanak-gu also transacted at a deposit of 10 million won ($7,300) and a monthly rent of 3 million won.

Experts expect monthly rents to keep rising as the volume of new apartment move-ins is set to fall further this year.

According to Real Estate 114, the number of new apartment units scheduled for move-in nationwide this year stands at 175,370 — a drop of 62,707 units, or 26.3 percent, from last year's 238,077. Seoul is expected to see the steepest decline among all regions, with move-in volume projected to fall 41.7 percent to 18,880 units from 32,370 last year.

"Jeonse supply has long acted as a brake on monthly rent increases, but as jeonse listings shrink, that moderating effect has weakened," said Yoon Ji-hae, head of the research lab at Real Estate 114. "A shortage of new supply combined with growing demand for newly built rental units will keep monthly rents on an upward trajectory."

As instability in the lease market has intensified, the government recently announced a plan to expand the supply of non-apartment rental housing. The centerpiece of the plan is the provision of 66,000 purchased rental units in regulated zones in Seoul and Gyeonggi Province over the next two years.

“재건축 더 늦어지면 안돼” 서울 표심, 움직였다 [부동산360]

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