The Volume of Officetel Jeonse Transactions Decreases... High-Value Monthly Rent Contracts Increase

Seoul Officetel Transactions Under 500,000 KRW per Month
39.5% Lowest Ever Recorded

This year, the proportion of officetel monthly rent contracts in Seoul with rent prices below 500,000 KRW reached an all-time low. Due to the impact of jeonse fraud, demand for jeonse has shifted to monthly rent, causing monthly rent prices to rise.

Transaction share of Seoul officetels by monthly rent range from 2011 to 2023. (Provided by Gyeongje Manlab)

On the 14th, Economic Man Lab, a real estate information provider, analyzed the Ministry of Land, Infrastructure and Transport’s actual transaction price disclosure system and found that from January to November 2023, the number of monthly rent transactions for officetels in Seoul totaled 36,068. Among these, transactions with monthly rents between 100,000 and 590,000 KRW accounted for 14,234, representing 39.5% of all monthly rent transactions. This is the lowest proportion since the Ministry began compiling related statistics in 2011 (based on January to November data).

The proportion of Seoul officetel monthly rent transactions priced between 100,000 and 590,000 KRW was highest in 2014 at 71.9%, and has steadily declined since, recording 45.9% in 2022.

Transactions and transaction proportions for officetels priced between 600,000 and 990,000 KRW reached record highs. This year, the number of monthly rent transactions in Seoul within this range was 17,351, accounting for 48.1% of transactions?the highest since statistics began. Transactions priced at 1,000,000 KRW or more also totaled 4,483, making up 12.4% of the market.

Among Seoul’s 25 autonomous districts, Geumcheon-gu had the highest proportion of officetel transactions priced between 100,000 and 590,000 KRW. From January to November this year, Geumcheon-gu recorded 1,717 officetel monthly rent transactions, of which 1,128 were in the 100,000 to 590,000 KRW range, accounting for 65.7% of all monthly rent transactions.

Following were Eunpyeong-gu (63.7%), Gwanak-gu (63.5%), Guro-gu (55.3%), Jungnang-gu (52.8%), Nowon-gu (50.4%), and Seongbuk-gu (48.8%).

The districts with the highest proportion of officetel transactions priced at 1,000,000 KRW or more were Seocho-gu and Yangcheon-gu. From January to November, Seocho-gu recorded 1,146 monthly rent officetel transactions, with 323 transactions priced at 1,000,000 KRW or more, representing 28.2% of total transactions. Yangcheon-gu also showed a 28.2% share, with 176 out of 625 monthly rent transactions priced at 1,000,000 KRW or more.

Other districts with notable proportions of monthly rent transactions priced at 1,000,000 KRW or more included Gangnam-gu (25.8%), Jung-gu (25.5%), Yongsan-gu (24.2%), Songpa-gu (22.1%), Yeongdeungpo-gu (18.7%), and Seongdong-gu (15.6%).

Looking at the price ranges, from January to November this year, monthly rent contracts in the 600,000 KRW range numbered 6,840, accounting for the highest share of 19.0% of all monthly rent contracts, followed by the 500,000 KRW range at 15.8%, the 700,000 KRW range at 13.8%, and 1,000,000 KRW or more at 12.4%.

Hwang Hansol, a research analyst at Economic Man Lab, said, "Due to the impact of jeonse fraud, demand for officetel jeonse has shifted to monthly rent, increasing high-priced monthly rent contracts. As the number of single-person households rapidly grows, the proportion of high-priced officetel monthly rent contracts may also increase."

Meanwhile, from January to November this year, the number of jeonse transactions for Seoul officetels was 23,287, the lowest since 2019 (22,168). During the same period, sales transactions totaled 7,375, the lowest since 2013 (6,292).