Average monthly rent in South Korea jumped more than 6 percent in the first three months of the year due to an increasing number of people switching from long-term jeonse contracts to monthly rentals, according to the nation’s statistics agency Statistics Korea on Monday.
Households, including single-person ones, paid 328,000 won ($291) on average for rent in the first quarter, up from 308,000 won in the same period last year. Of the 7,200 households surveyed by the agency, 19.9 percent were living on monthly rent, and their housing expenditure had risen fast in recent months.
The average monthly rent dropped 9 percent on-year in the first quarter last year, 7.1 percent in the second quarter last year, and 2.1 percent in the third quarter last year. It, however, took an upward turn in the fourth quarter with the average monthly fee growing 4.5 percent year-on-year.
The monthly rental fee accounted for 16.5 percent of the households’ average monthly spending of 1.98 million won. They spent 268,000 won on groceries and beverage products and 269,000 won on eating out.
Some market experts forecast the government’s tough tax policies concerning real estate would weigh down on tenants, and fail to put a lid on soaring home prices.
“The number of monthly rental houses has increased due to the shortage of jeonse supply caused by the government’s regulation to cap the maximum rent hike at 5 percent in the event of contract renewals,” a market watcher said.
“The trend will likely continue until next year unless mid- and long-term housing supply measures are not announced.”
In Seoul, the number of households living on monthly rent accounted for 31.3 percent in 2020, up from 26 percent in 2015, while the proportion of jeonse tenants fell from 32.9 percent to 26.2 percent during the same period, according to a recent report released by the Seoul Metropolitan Government.
By Kim Young-won (email@example.com