A 29.7㎡ Room in Sillim Study Area Now 1 Million Won per Month... Youth Hit by Rent Shock [Real Estate AtoZ]

Monthly rents above 1 million won for units under 30 sq. meters have increased sixfold in five years
In January-August of this year, 78.7% of officetel contracts were monthly rentals

One out of every eight contracts for small officetel rentals in Seoul involves a monthly rent of at least 1 million won. The share of such high-value rents for units of 30㎡ or less has increased sixfold over the past five years. In university areas, even officetels measuring just 16.5㎡ (approximately five pyeong) are fetching monthly rents of 1.2 million won, highlighting the growing housing cost burden faced by the younger generation.

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According to an analysis of data from the public real transaction price system of the Ministry of Land, Infrastructure and Transport on October 3, out of 40,342 new and renewed contracts for Seoul officetels with exclusive areas of 30㎡ or less from January to August this year, 5,062 contracts (12.5%) had monthly rents of 1 million won or higher. In contrast, the proportion of 1 million won or higher monthly rents for similarly sized officetels during January to August 2021 was just 2.1%. In approximately five years, the share of high-value rents of 1 million won or more has surged sixfold.

These high rents have spread to areas popular among young people. In 2021, there were no rental contracts surpassing 1 million won per month in districts such as Seodaemun, Jongno, Gwanak, and Geumcheon among similar unit sizes. However, during January to August this year, there were 248, 223, 201, and 187 such contracts in these districts, respectively. As a result, studio apartments in Sinchon, Daehak-ro, and Gwanak’s study centers have seen their monthly rents rise to over the 1 million won range.

Monthly rental information for officetels is posted at a real estate agency in Seoul. Yonhap News Agency

At 'Greenwood', a 17㎡ officetel in Daehyeon-dong, Seodaemun-gu, near Ewha Womans University, a new lease was signed on August 26 with a deposit of 10 million won and a monthly rent of 1.2 million won. In other words, it now costs 1.2 million won per month to rent just 16.5㎡. Similarly, at 'El Luce', a 24.99㎡ unit in Hyehwa-dong, Jongno-gu near Sungkyunkwan University, a new tenant moved in on July 8 with a deposit of 30 million won and a monthly rent of 1.2 million won.

At 'Yangji High Start', a 29.75㎡ officetel in Bongcheon-dong, Gwanak-gu near Seoul National University station, a new lease was concluded on January 19 at a deposit of 50 million won and a monthly rent of 1.4 million won. In Seoul National University's study area, the 'Ilseong True Well' (31.19㎡) was newly leased on May 19 at a deposit of 20 million won and a monthly rent of 1 million won. Meanwhile, at 'Gasan Central Prugio City', a 24.11㎡ unit in Gasan-dong, Geumcheon-gu, with strong rental demand from the nearby Gasan Digital Complex, a renewed lease was made on May 6 at a deposit of 10 million won and a monthly rent of 1.09 million won.

The proportion of small officetel rentals in the 500,000–700,000 won range has halved from 47.0% in 2021 to 24.7% in 2026. Units rented for 500,000 won or less represented 32.0% this year, similar to 33.3% in 2021.

Medium- and large-sized officetels, considered alternatives to apartments, also saw a sharp rise in the proportion of high-value monthly rentals. Among contracts signed from January to August, for medium-sized officetels (over 60㎡ up to 85㎡), the share of deals with monthly rents over 1.5 million won increased from 18.3% (66 contracts) in 2021 to 49.6% (486 contracts) this year — a 2.7-fold rise. The share of ultra-high rents of 2 million won or more tripled from 9.1% (33 contracts) to 29.6% (290 contracts). For large officetels over 85㎡, which can accommodate families, the share of deals at 2 million won or higher jumped from 18.4% (34 contracts) in 2021 to 39.5% (124 contracts) this year.

Jeonse contracts are rapidly disappearing in the officetel rental market. The proportion of monthly rental contracts out of total jeonse and monthly rental contracts for Seoul officetels grew from 50.1% in January–August 2021 to 78.7% in the same period this year, a 28.6 percentage point increase. Meanwhile, the number of jeonse contracts dropped 36.3% from 21,695 to 13,817 during the same period. This trend reflects a combination of landlord preference for monthly rentals and a shortage of apartment jeonse contracts.

With apartment jeonse prices rising, even non-apartment jeonse deals have switched predominantly to monthly rent, further raising housing cost pressures for the younger generation. For officetels of 30㎡ or less, a deposit in the 10–20 million won range is standard, and a monthly rent of 1 million won results in an annual rental cost of 12 million won.

Cho Jeong-heun, chair of the Land and Housing Committee at the Citizens’ Coalition for Economic Justice, commented, “As jeonse contracts are rapidly being replaced by monthly rents in the officetel market and the limits on jeonse loans and guarantees are also shrinking, there is a counter-effect with more tenants being pushed onto monthly leases. There is a mismatch: landlords prefer the stable income of monthly rent, while tenants want jeonse, resulting in a reduced supply of jeonse and only pushing up monthly rents.”

Experts warn that allowing this steep upward trend in monthly rents to continue may ultimately lead to a market dominated by corporate landlords capable of deploying large-scale capital. This is because high monthly yields are a prerequisite for the entry of corporate landlords. Chair Cho stated, “The current environment of soaring monthly rents has laid the groundwork for corporate landlords pursuing high returns to operate profitably. The government, instead of focusing on housing stability for ordinary people, is concentrating its policies in the wrong place, such as fostering corporate landlords, thereby increasing the housing cost burden on the younger generation.”

This content was produced with the assistance of AI translation services.