Seoul Metropolitan Area Monthly Rent Listings Share at 67.8% This Month... Up 6.26%p from a Year Ago
[Asia Economy Reporter Onyu Lim] Due to the implementation of the new lease protection law, including the rent ceiling system and the right to request contract renewal, the proportion of monthly rent is increasing in the Jeonse and monthly rent market in the Seoul metropolitan area. As more landlords pass on the increased tax burden to tenants through monthly rent, concerns are rising over housing instability among low-income residents.
According to real estate platform Dabang on the 28th, an investigation of Jeonse and monthly rent listings registered on its app in the Seoul metropolitan area showed that the proportion of monthly rent listings reached 67.80% from the beginning of this month to the 22nd. This is an increase of 6.26 percentage points (p) compared to the same period in February last year. From February last year to October, three months after the new lease law was implemented, the proportion of monthly rent listings increased by 1.55%p. However, from November to this month, it rose by 4.71%p.
The trend of Jeonse turning into monthly rent was particularly noticeable in Seoul. The proportion of monthly rent listings in Seoul this month reached 63.38%, an increase of 4.75%p compared to October last year (58.63%).
By listing type, the proportion of monthly rent for one-, two-, and three-room units (villas, officetels, etc.) in Seoul increased by 6.21%p over one year from February last year to this month, reaching 64.52%. Apartments also recorded an increase of 8.29 percentage points to 42.83%.
Among Seoul’s autonomous districts, the increase in the proportion of monthly rent was steepest in the Gangnam 3 districts (Gangnam, Seocho, Songpa). Gangnam-gu saw an increase of 11.41%p over one year, from 77.02% in February last year to 88.43% this month. This means that 9 out of 10 Jeonse and monthly rent listings registered on Dabang in Gangnam-gu are monthly rent. During the same period, Seocho-gu rose from 59.41% to 69.05%, and Songpa-gu from 57.08% to 73.28%. The Gyeonggi and Incheon areas showed similar patterns. The proportion of monthly rent listings was 67.39% in February last year but rose to 72.38% this month.
Park Sung-min, Director of Business Marketing at Dabang, forecasted, “Since the lease period has effectively extended to four years after the implementation of the lease law, and with continued low interest rates and the increase in comprehensive real estate tax, the trend of housing owners converting Jeonse listings into monthly rent is expected to continue for the time being.”
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