More monthly rental contracts signed than jeonse contracts

Economy

Published: 02 Jun. 2022, 18:06 Updated: 03 Jun. 2022, 16:23

More monthly rental contracts signed than jeonse contracts

Notices of apartments for sale are posted on a window at a realtor's office in Seoul. The number of monthly rentals were more than half of the total lease contracts in the country in April for the first time, according to the Ministry of Land, Infrastructure and Transport. [YONHAP]

More than half of the residential rent contracts signed in April were monthly rentals instead of the long-term leases. It was first time since the data were first compiled that the 50-percent mark was broken.

Out of 258,318 residential rent contracts signed nationwide in April, 50.4 percent — 128,023 contracts — were monthly rentals as opposed to jeonse lump-sum long-term deposit leases, according to a report by the Ministry of Land, Infrastructure and Transport on Tuesday.

It was the first time that more monthly rental deals were signed than jeonse contracts since 2011, when the relevant data were first compiled.

In accumulated data from January to April, monthly rentals were 48.7 percent of the total, up 6.5 percentage points compared to the same period last year, and up 7.1 percentage points from the five-year average.

The ministry cited the strengthened regulations on lease deals for the upward trend in the monthly rent contracts.

Last June, it became mandatory to inform the local government office within 30 days of signing a lease contract with the aim of enhancing transparency in the real estate market. The number of monthly rental transactions reported to the government increased in accordance with the policy change, as rental transactions for multi-purpose buildings used for residential purposes — such as officetels (a building used for both commercial and residential purposes in Korea) and gosiwon (small studios primarily meant for students) — began to be reported as well. Rental transactions for such buildings hadn't been closely tracked before.

Nationwide real estate sales transactions jumped 9.3 percent on month to 58,407 in April. It is a 37.2 percent drop compared to the same period last year.

In Seoul, there were a total of 6,120 transactions in April, a 20.0 percent increase compared to the previous month. It was a 48.5 percent decline year-on-year. The number was 13,261 in Gyeonggi, up 15.7 percent on month and down 44.9 percent on year, and 3,965 in Incheon, up 11.8 percent on month and down 56.3 percent on year.

Apartment transactions increased 9.8 percent on month to 35,679, but declined 39.8 percent on year. Transactions of other housing except for apartments climbed 8.4 percent to 22,728 on month while plunging 32.8 percent on year.

BY HONG SU-MIN [shin.hanee@joongang.co.kr]