As More People Choose to Live in Jeju, Monthly Rentals Hit 80%, Highest in the Nation

Jeju Leads the Nation in Monthly Rental Proportion Due to High Tenant Demand
Monthly Rentals Account for 60.7% of Housing Lease Transactions Nationwide in Q1

As the proportion of monthly rental contracts in the nationwide housing lease market has surpassed 60%, Jeju Province has recorded the highest monthly rental rate in the country at 80%.

According to the Ministry of Land, Infrastructure and Transport on May 3, the share of monthly rental transactions (including guaranteed monthly rent and semi-jeonse contracts) in the nationwide housing lease market during the first quarter of this year was 60.7%. This represents an increase of 2.8 percentage points compared to the same period last year, and a rise of 18.6 percentage points compared to the first quarter of 2021, four years ago, when the figure was 42.1%.

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Jeju recorded the highest proportion of monthly rental contracts in the country. In the first quarter of this year, 80% of housing lease agreements in Jeju that received an official contract date were monthly rental contracts. Jeju has a unique leasing culture called "Yeonse," in which tenants traditionally pay one year's rent in advance. Due to its island geography, Jeju has long favored Yeonse transactions that allow landlords to receive rent stably and in advance, and Yeonse contracts are also classified as monthly rentals in the statistics.

The reason why Jeju has a significantly higher proportion of monthly rentals compared to other regions is the strong demand for rental properties. Recently, a trend of "living in Jeju for a year" has attracted many travelers seeking short-term stays, and these individuals often sign monthly rental contracts. Another factor contributing to the expansion of the monthly rental market is Jeju's aging population, which is higher than the national average. Elderly landlords tend to prefer stable income over managing large lump-sum deposits, further boosting the monthly rental market.

It is important to note that Yeonse contracts can pose problems if tenants wish to move out before the contract period ends. Under the Civil Act, a monthly rental contract can be terminated if the rent is overdue for two months or more. However, there are no clear regulations regarding overdue payments in Yeonse contracts. There are frequent cases in which tenants with Yeonse contracts move out early and claim a refund for the remaining months of rent.

In Seoul, the proportion of monthly rental contracts in the first quarter of this year was 64.3%. Daejeon (68.5%), Ulsan (68.0%), and Busan (66.5%) also recorded higher monthly rental rates than Seoul. As issues such as jeonse fraud and reverse-jeonse problems have emerged across the country, tenants appear to be opting for monthly rental contracts rather than taking on the risks associated with jeonse agreements. Market experts note that as the jeonse market has entered a seasonal off-peak period and transactions have decreased, some landlords facing urgent circumstances may convert part of their guaranteed monthly rental units into jeonse contracts. However, most experts believe that the trend of converting jeonse to monthly rentals will continue in the long term.