Monthly apartment rents in Seoul's outer districts are climbing rapidly. The era of 3-million-won monthly rents, once seen only in high-end apartments in Gangnam, is now spreading to the capital's outer areas, including Nowon, Dobong and Gangbuk districts in the northeast, and Geumcheon, Gwanak and Guro districts in the southwest.
According to the Ministry of Land, Infrastructure and Transport's real transaction price disclosure system on Tuesday, high-value monthly rental contracts were signed one after another in Seoul's outer districts last month.
A 105-square-meter unit at D-Cube City in Sindorim-dong, Guro district, took on a new tenant on the 2nd of last month with a 100 million won deposit and a monthly rent of 3.6 million won. In the same neighborhood, a 169-square-meter unit at Donga 1 Apartment also signed a new contract on the 20th of last month with a 250 million won deposit and a monthly rent of 3 million won.
Contracts exceeding 2 million won a month are also continuing in Nowon, Geumcheon and Dobong districts.
An 84-square-meter unit at Wolgye Central I'Park in Wolgye-dong, Nowon district, took on a tenant on the 4th of last month with a 100 million won deposit and a monthly rent of 2.7 million won. A 72-square-meter unit at Geumcheon Lotte Castle Gold Park 1 in Doksan-dong, Geumcheon district, signed a contract on the 4th with a 100 million won deposit and a monthly rent of 2.2 million won. A 124-square-meter unit at ESA Apartment 1 in Banghak-dong, Dobong district, signed a new monthly rental contract on the 29th of last month with a 100 million won deposit and a monthly rent of 2 million won.
The biggest reason rents are rising even in Seoul's outer districts is a supply shortage.
According to real estate platform data, new apartment move-in volume in Seoul this year stands at just around 4,000 units. Considering that Seoul's appropriate annual demand is estimated at around 46,000 units, supply falls far short.
Rental listings are also declining rapidly. Jeonse listings for Seoul apartments are down more than 40 percent from a year earlier, and monthly rental listings have also decreased.
In the aftermath of jeonse fraud cases, landlords are increasingly favoring monthly rent, which provides stable monthly cash flow, over jeonse (a Korean lease system requiring a large lump-sum deposit instead of monthly rent), which requires holding a large sum. Tenants, too, are opting for monthly rent, which carries a relatively lighter upfront burden, amid soaring jeonse prices and tightened lending regulations.
Experts warn that if the supply shortage and the shift from jeonse to monthly rent continue, instability in the rental market could be prolonged.
