[Asia Economy Reporter Kim Hyemin] It has been revealed that half of the new rental contracts for housing in Seoul are monthly rent agreements. The proportion of monthly rent was higher in new contracts than in renewal contracts, where only one in five cases was monthly rent, and the residential area was also smaller. There are concerns that the living conditions of tenant households have worsened due to rising jeonse and monthly rent prices.
On the 20th, Real Estate R114 analyzed the actual transaction data from the Ministry of Land, Infrastructure and Transport and found that from June to November last year, when the rental reporting system was implemented, the total number of housing rental transactions in Seoul was 136,184. Housing includes apartments, detached/multi-family houses, and row houses/multi-unit buildings.
Among these, renewal transactions accounted for 37,226 cases, and new transactions were 98,958 cases.
Among the 37,226 renewal contracts, the proportion of monthly rent was 21.9% (8,152 cases). In contrast, the proportion of monthly rent contracts in new contracts was 48.5% (47,973 cases). This means that the proportion of monthly rent in new contracts was more than twice as high.
Looking at the proportion of monthly rent in renewal contracts by housing type, detached/multi-family houses had the highest at 29.8%. This means that 29.8% of all renewed detached/multi-family houses were contracted as monthly rent. This was followed by apartments at 22.5%, and row houses/multi-unit buildings at 16.6%. In the case of new contracts, the proportion of monthly rent for detached/multi-family houses was as high as 67.1%. This indicates that new contracts are more often monthly rent than jeonse.
The average transaction area also showed differences depending on whether the contract was renewal or new. The average housing area transacted during the same period was 54.6㎡, with renewals averaging 65.7㎡ and new contracts averaging 50.4㎡. For all housing types, the average housing area for renewed contracts was larger than that for new transactions. Senior expert Ye Gyeonghee of Real Estate R114 estimated, "As the level of housing deposit has increased and loans have become more difficult, new tenants have moved by reducing their residential area."
While the living conditions of tenants in newly contracted houses have worsened, from July this year, existing tenants who renewed their contracts will also see their contracts expire and will enter the new jeonse market. Senior researcher Ye said, "With the demand from these tenants along with the moving season demand, the rental market could become unstable."
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