After the New Lease Law Implementation... Seoul Studio Apartment Jeonse Transactions Under 100 Million Won Also Plummet

Gangnam-gu Drops Most Significantly by 50% Compared to Previous Month
Songpa-gu, Yangcheon-gu, and Seodaemun-gu Also Decrease by Over 40%

[Asia Economy Reporter Onyu Lim] Due to the implementation of the new lease law, including the right to request contract renewal and the cap on monthly rent increases, the volume of jeonse (long-term deposit lease) transactions for one-room units (multi-family or multi-unit housing with exclusive area of 30㎡ or less) with a deposit of 100 million KRW or less has sharply declined.

According to an analysis by the real estate information platform Dabang of the Ministry of Land, Infrastructure and Transport's actual transaction price disclosure system on the 28th, last month in Seoul, the total number of one-room jeonse transactions with deposits of 100 million KRW or less was recorded at 1,131 cases. The number rose to 2,141 cases in February but then decreased for three consecutive months, slightly increased in June (1,504 cases), and then declined again for two consecutive months. Last month's transaction volume decreased by 21% compared to the previous month.

With the new lease law taking effect on July 31, even the volume of one-room jeonse transactions with deposits of 100 million KRW or less sharply declined.

Among the 25 districts, 20 districts saw a decrease. The area with the fewest transactions was Gangnam-gu (11 cases), which decreased by 50% compared to the previous month, showing the largest decline among the 25 autonomous districts. Songpa-gu (22 cases), Yangcheon-gu (19 cases), and Seodaemun-gu (35 cases) also showed a decrease of over 40%. The district with the highest number of transactions was Gwanak-gu (152 cases), which was the only district to record triple-digit transaction volume, but even this figure fell by 31% compared to the previous month.

However, Jung-gu (22 cases), Nowon-gu (44 cases), Seocho-gu (16 cases), Seongdong-gu (45 cases), and Yongsan-gu (34 cases) saw an increase compared to the previous month.

Last month, the average one-room jeonse deposit for detached (multi-family), multi-unit, and row houses in Seoul was 162.46 million KRW, far exceeding 100 million KRW.

By district, the average deposit exceeded 100 million KRW in 23 districts except for Gangbuk-gu (94.03 million KRW) and Nowon-gu (86.35 million KRW) last month.

A Dabang official stated, "Due to the prolonged COVID-19 pandemic and the implementation of the new lease law, market instability has intensified, leading to a decrease in one-room transactions with deposits of 100 million KRW or less in Seoul since July," and added, "With the rise in jeonse deposits and the shift to monthly rent, transactions for jeonse deposits under 100 million KRW are expected to continue to decline."