With Expectations for the Resumption of In-Person Classes... Monthly Rent in University Area One-Room Districts Also Stirring

80-90% Occupancy Near School Completed
Preference Shifts from Ultra-Short to Long-Term Rentals
Average Monthly Rent Exceeds 500,000 Won Again

[Asia Economy Reporters Tae-min Ryu and Seo-yul Hwang] “Since the COVID-19 pandemic began, this semester seems to have had the most tenants. In fact, almost all students have moved into one-room apartments in prime locations.” (Mr. A, head of a real estate agency in Anam-dong, Seongbuk-gu, Seoul)

The one-room apartment districts near universities are coming back to life. Most universities are operating this semester with a mix of in-person and online classes, which has significantly increased demand for nearby one-room apartments. Additionally, since early December last year, with expectations of entering the ‘With Corona (gradual return to normal life)’ phase, more students have started signing long-term leases for one-room apartments. Mr. A said, “About 80-90% of one-room apartments near schools have been rented out,” adding, “This is a completely different situation from last year when over two-thirds of units were vacant.”

Although the semester started several days ago, real estate agencies near schools continue to receive inquiries about leases. The situation was similar at a real estate agency near Sinchon on the afternoon of the 4th. A female student who visited one agency put her name on a waiting list for available units and left. The signs saying ‘One-room for rent’ and ‘Vacancies available,’ which were plastered all over university main gates and buildings last year, have also disappeared.

As demand for one-room apartments rises, monthly rents near universities are also increasing. According to the data analysis center of the real estate platform Dabang, the average monthly rent for one-room apartments (exclusive area under 33㎡, with a deposit of 10 million KRW) around 10 major universities in Seoul, including Yonsei University, Korea University, and Kyung Hee University, was 502,000 KRW as of January. This is the first time since the shift to online classes due to COVID-19 that rents have surpassed 500,000 KRW again. The average monthly rent near major universities had fallen from 540,000 KRW in January 2019 and remained in the 400,000 KRW range for three years. In particular, it hit a low of 447,000 KRW in July last year, six months ago. By region, the area near Hongik University saw the largest increase, rising from 530,000 KRW to 710,000 KRW in six months, while Yonsei University (440,000 KRW → 510,000 KRW), Chung-Ang University (460,000 KRW → 490,000 KRW), and Seoul National University (320,000 KRW → 330,000 KRW) also experienced rent increases.

The ‘ultra-short-term contracts’ of less than three months, popular during online classes, are also disappearing. Mr. Sung (69), who has been renting one-room apartments in Hwikyung-dong, Dongdaemun-gu, Seoul, where universities such as Kyung Hee University and Hankuk University of Foreign Studies are concentrated, for 13 years, said, “During the peak of COVID-19, there were so few tenants that most contracts were ultra-short-term, lasting 1 to 3 months, with monthly rents discounted by 50,000 to 100,000 KRW. This time, contracts are generally signed for 6 months or a year in line with the semester schedule, and rents have returned to normal.”

With rising rents, students are feeling more financial pressure. Mr. Sung (24), a third-year student at Yonsei University, said, “Because it’s burdensome to cover monthly rent costs, I decided to give up living on my own and only attend online classes.” According to real estate agencies near Sinchon, the average monthly rent for one-room apartments this semester is 550,000 to 600,000 KRW with a 10 million KRW deposit, and highly preferred officetels have many tenants willing to sign contracts even if the rent exceeds 800,000 KRW. Mr. Lee (23), a third-year student at Korea University, said, “Since it’s uncertain whether classes will switch back to in-person, I decided to live on my own for now,” adding, “I started working part-time on weekends to cover rent and living expenses.”