"At Least 160 Million Won Needed"... New Lease Law Hits Seoul One-Room Jeonse Rentals Too

Sharp Decline in Studio Apartment Transactions Under 100 Million Won as Jeonse Prices Rise and Listings Dry Up
Seoul Studio Apartment Average Jeonse Price Rises for 7 Consecutive Months to 162.46 Million Won
"At Least 200 Million Won Needed in Gangnam"

[Asia Economy Reporter Lim Onyu] The new Lease Protection Act has spread to the Seoul one-room jeonse market. As jeonse listings become scarce, transaction volumes are decreasing and jeonse prices are rising. At least 200 million KRW is needed to find a one-room in the Gangnam 3 districts.

According to Dabang on the 30th, the number of transactions for single-family (multi-family), multi-unit, and row houses in Seoul with jeonse prices under 100 million KRW last month totaled 1,131. This is the lowest figure this year, representing a 21% decrease compared to July before the new Lease Protection Act, including the rent ceiling system and contract renewal rights, was implemented.

By district, transactions decreased in 20 out of 25 districts in Seoul. The district with the largest drop was Gangnam-gu. Last month, there were only 11 cases of one-room jeonse contracts with deposits under 100 million KRW in Gangnam-gu, a 50% decrease from the previous month.

Following were Songpa-gu (22 cases), Yangcheon-gu (19 cases), and Seodaemun-gu (35 cases), all showing decreases of over 40%. The district with the highest number of transactions was Gwanak-gu (152 cases). Although it was the only district with triple-digit transaction volume, it also fell by 31% compared to the previous month.

Conversely, five districts showed an increase in transactions under 100 million KRW. Jung-gu (22 cases) rose by 57%, and Nowon-gu (44 cases), Seocho-gu (16 cases), Seongdong-gu (45 cases), and Yongsan-gu (34 cases) all showed relatively modest increases of about 5-10%.

The decrease in one-room jeonse transactions under 100 million KRW is attributed to the prolonged COVID-19 pandemic and the effects of supply shortages and jeonse price increases caused by the new Lease Protection Act.

A Dabang official said, “Due to the prolonged COVID-19 situation and the implementation of the second Lease Protection Act, instability in the rental market is intensifying. With rising jeonse deposits and the conversion of jeonse to monthly rent, transactions under 100 million KRW are expected to continue decreasing for the time being.”

The average one-room jeonse price in Seoul’s 25 districts has been rising for seven consecutive months. It increased from 139.5 million KRW in January to 162.46 million KRW last month. The only districts where the average one-room jeonse price is below 100 million KRW are Gangbuk-gu (94.03 million KRW) and Nowon-gu (86.35 million KRW).

In particular, to find a one-room in the Gangnam 3 districts?Gangnam, Seocho, and Songpa?an average of over 200 million KRW is required. According to Dabang, last month the average one-room jeonse price in Songpa-gu reached 200.614 million KRW, surpassing 200 million KRW for the first time. Seocho-gu recorded 238.75 million KRW, and Gangnam-gu 233.13 million KRW.

Among Seoul’s 25 districts, Dobong-gu (128.26 million KRW) saw the largest month-on-month increase in average jeonse price last month, with a rise of 24.1%.