"The whole house shock" has moved on...Even the monthly rent has turned downward

"The whole house shock" has moved on...Even the monthly rent has turned downward

 

[The rental market is frozen]
Jeonse sales accumulated and monthly rent conversion increased...It's been three years and a month since the monthly rent fell
Landlord who can't get a deposit...A cold wave is blowing in the rental market of the spread of interest "reverse monthly rent" to tenants (E-Daily reporter Park Jong-hwa). Even monthly rent, which used to be "accelerating monthly rent," has turned downward. Landlords are worried that they will not be able to return the deposit at a time when the interest burden is increasing. According to the Korea Real Estate Agency on the 18th, the national monthly rent price in November fell 0.11% from the previous month. It is the first time in three years and a month that the monthly rent price has fallen from the previous month since October 2019.

 

Until now, the monthly rent market has enjoyed a reflective profit from the decline in the jeonse market. This is because demand for jeonse has shifted to the monthly rent market due to a rise in interest rates on jeonse loans. According to the Ministry of Land, Infrastructure and Transport, the proportion of monthly rent among housing lease contracts reported from January to October this year was 51.8%, exceeding the lease. This is the first time this year that monthly rent contracts have become more than lease contracts since statistics were compiled. For this reason, monthly rent rose 1.2% this year while jeonse prices fell 3.2% on average nationwide.

In the real estate market, as the slump in the jeonse market reached a critical point, the shock shifted to the monthly rent market. This means that the monthly rent market is falling as jeonse prices fall and accumulation of sales intensifies. According to Azil, a real estate big data company, the number of rental and monthly rent items in apartments in Seoul was 85,784 as of the 16th, up 44.5% from 59,337 cases six months ago. In particular, monthly rent nearly doubled in half a year from 16,168 to 31,251. Although the demand for conversion to monthly rent has increased, it is interpreted as an effect of the accumulation of sales recently.

Ham Young-jin, head of Zigbang Big Data Lab, said, "It is too early to predict whether this trend will be prolonged just one month later. I think we need to watch the flow for about a quarter, he said. "I think supply has increased and prices have fallen as the rental market has recently moved around monthly rent."

Experts believe that if this trend continues, tenant advantage in the rental market could be solidified. It is a negative factor for landlords who are already struggling with falling housing prices, rents, and high interest rates. The lowered monthly rent could bring down jeonse prices, and concerns about can jeonse (the deposit approaches housing prices or exceeds housing prices) could spread.

 

 

In large metropolitan cities, where housing prices have fallen for a long time, concerns are already growing even in medium and large complexes. At the "Opera Truel Citizen's Forest" in Goseong-dong 3-ga, Buk-gu, Daegu, with 682 households, an exclusive 84㎡ sales contract was signed for 428 million won last month. The apartment-like lease price, which was reported in May this year, is less than 450 million won. In Songdo The Sharp Green Walk 3rd 18th Complex in Songdo-dong, Yeonsu-gu, Incheon, with 780 households, the 84㎡ type was also sold this month for 650 million won, which is the level of jeonse at the beginning of the year. If housing prices do not rebound, the burden of returning the deposit will be high when the lease and monthly rent contracts expire.

The situation in Seoul is better, but the "reverse monthly rent" is spreading. The landlord, who cannot return or lower the deposit at once due to his inability to raise a large sum of money, pays a certain amount of money to tenants every month in return for renewing the contract. Reverse monthly rent is becoming more prevalent as tenants' voices have grown due to the recent fall in jeonse and monthly rent.

Ham Young-jin, head of the lab, predicted, "If sales accumulate by monthly rent, tenants' bargaining power will inevitably be strong," adding, "As a result, jeonse and monthly rent prices could also fall further."