Last Year, Nationwide Jeonse and Monthly Rent Fell for the First Time in 14 Years... Ulsan -2.2%

[Asia Economy Reporter Chunhee Lee] Last year, the prices of jeonse and monthly rent fell for the first time in 14 years. In particular, Ulsan, which was hit hard by the downturn in key industries, saw a 2.2% drop, marking the largest decline nationwide.

According to the Consumer Price Survey by Item Characteristics from Statistics Korea on the 28th, the national rent index last year was 104.04, down 0.11% from the previous year. This is the first time since 2005, in 14 years, that the national rent index has declined compared to the previous year.

Breaking it down into jeonse and monthly rent, while jeonse slightly increased, monthly rent led the decline by falling 0.42% compared to the previous year. The nationwide monthly rent price, which had been rising for 11 consecutive years since 2007, fell 0.28% in 2018 and declined for two consecutive years. Jeonse rose 0.18%, but recorded the smallest increase since 2005 (0.73%), showing only a slight upward trend.

By region, Incheon showed the highest increase nationwide with a 0.35% rise. Incheon also saw the highest rise in jeonse and monthly rent among metropolitan municipalities nationwide in 2018, increasing 1.23% compared to the previous year.

On the other hand, Ulsan’s rent fell 2.19% compared to the previous year, showing the most prominent decline. The drop was the largest in 19 years since 2000. This is believed to be largely due to the contraction of local base industries such as shipbuilding. In particular, in March last year, the rent fell by as much as 0.39% compared to the previous month. However, as the shipbuilding industry somewhat improved in the second half of the year, the decline seemed to slow down, with rent stabilizing in November last year.

In Seoul, rent rose 0.33%, but the increase was the smallest since 2006. Similar to the national trend, the two consecutive years of decline in monthly rent had a significant impact. Jeonse prices also rose only 0.77%. In Gyeonggi-do, jeonse fell 0.12%, monthly rent dropped 0.15%, and overall rent declined 0.12%. This is the first time since 2005 that rent in Gyeonggi-do has shown a downward trend.