Apartment Jeonwolse Transaction Volume Hits Record High... "Buying Demand Weakens Due to House Price Decline"

Last Year Nationwide Lease Transactions 1.23 Million
"Preference for Jeonwolse over Purchase Amid Falling House Prices"
Impact of 2021 Enacted 'Jeonwolse Reporting System'

Last year, the nationwide volume of apartment lease and monthly rent transactions reached an all-time high. This is attributed to the increasing demand for leases and monthly rents instead of purchases, due to the burden of high interest rates and growing concerns over further declines in housing prices.

According to data analyzed by real estate information company Economy Man Lab from the Ministry of Land, Infrastructure and Transport's actual transaction price disclosure system on the 11th, the volume of apartment lease and monthly rent transactions nationwide last year was recorded at 1,229,443 cases.

This is the highest figure since the survey of apartment lease and monthly rent transactions began in 2011. Nationwide apartment lease and monthly rent transaction volumes remained between 500,000 and 600,000 cases from 2011 to 2017, then rose to 721,000 cases in 2018, and showed an upward trend in the 800,000 range during 2019?2020. It recorded 959,000 cases in 2021 and surpassed 1 million for the first time in 2022 with 1,059,000 cases.

Among last year’s lease transactions, the volume of Jeonse (key money deposit lease) transactions was 701,552 cases. This set a record high, about 16% higher than the previous peak of 607,426 cases in 2021. Monthly rent transactions totaled 527,891 cases, also exceeding the previous record of 452,620 cases in 2022.

Experts analyze that the increase in lease transaction demand over purchases is due to the continued decline in apartment prices. Yoon Soo-min, a real estate specialist at NH Nonghyup Bank, explained, “Last year, housing prices fell compared to the previous year, and Jeonse prices were also low, so many demanders stayed in the lease and monthly rent market. Concerns that purchase prices could fall further prevented them from moving into buying.”

The ‘Housing Lease Reporting System (Jeonse and monthly rent reporting system)’ implemented in June 2021 also appears to have influenced the increase in lease and monthly rent transactions. This system requires reporting to local governments within 30 days of Jeonse or monthly rent transactions. Specialist Yoon analyzed, “From the time of implementation until last year, as lease contracts reached their expiration and were renewed, the number of reported cases seems to have increased.”