Monthly rent trades in Seoul hit new record in February

The trade volume for monthly rent apartments in Seoul reached a record high last month, especially in districts with popular high schools.

As bank interest rates and housing prices continued to remain low, house owners turned to monthly rent for sustainable income.

This imposed a burden on house seekers, but affluent parents were willing to pay in order for their children to gain access to prestigious schools, market analysts said.
 

According to the Seoul Metropolitan Government’s real estate information center, the total trade volume for monthly rent apartments last month was 5,250, up 32.1 percent from the previous month and an all-time high since the statistics were first made available in 2011.

The actual number of trades is estimated to be even higher as monthly rent tenants often move in without reporting the fixed date of their deal.

Among districts, Gangnam-gu topped the list with 750 cases, followed by Songpa-gu, Seocho-gu and Nowon-gu, with 542, 465 and 409 cases, respectively. The most inactive district was Geumcheon-gu, in southwestern Seoul.

“With the spring term coming up, many parents chose to move into popular school districts in February,” said Kim Eun-jin, research head at Real Estate 114, a real estate information center affiliated with Mirae Asset.

“Newlyweds and those who sought temporary residence due to the reconstruction of their houses also added to the growing demand for rent apartments.”

The market for jeonse ― a house rent system unique to South Korea that exempts tenants from monthly rent and instead requires them to pay a lump sum of cash ― remained weak.

The total jeonse trade volume in Seoul was 12,943 in February, down 11.9 percent from the same period last year.

By Bae Hyun-jung (tellme@heraldcorp.com)