Seoul's Shift to Monthly Rent: Causes, Cost Calculations, and Contract Checks

Seoul’s housing rental market is moving away from a structure in which jeonse was the norm and monthly rent was the exception. Deposit-based monthly rent and so-called semi-jeonse contracts are now commonly seen not only in small studio apartments but also in mid-sized apartments occupied by families.

However, the increase in monthly rental contracts alone is not enough to conclude that jeonse will soon disappear. To accurately assess the scale of the change and the burden on households, it is necessary to consider how transaction statistics are defined, the combinations of deposits and monthly rent, and interest rates and lending conditions.

The Shift Toward Monthly Rent in Seoul’s Rental Market, by the Numbers

Based on data provided by the operator and queries of the Ministry of Land, Infrastructure and Transport’s actual transaction price disclosure system, monthly rental contracts accounted for 49.8% of reported Seoul apartment rental contracts in the first half of 2026. The same data puts the figure for the first half of 2025 at 43.1%, showing that the share of monthly rental contracts has risen rapidly.

This figure may vary depending on the publication date, contract and reporting dates, whether canceled contracts are reflected, housing type, and the criteria used to classify monthly rentals. To cite the latest figure, the actual transaction price disclosure system should be checked again with the region set to Seoul, the housing type set to apartments, and the contract period set to the relevant half-year.

Points to Note When Interpreting the Share of Monthly Rentals

• The share of transactions differs from the share of resident households. It is the proportion of reported contracts that are monthly rental contracts, not an indication that half of Seoul’s renter households live under monthly rental arrangements.
• Monthly rentals include various types of contracts. They may include everything from pure monthly rentals with small deposits to semi-jeonse contracts with large deposits.
• The number of contracts is not the housing stock. It only shows the flow of contracts newly signed or renewed during a given period, not all contracts currently in effect.
• An increase in the share is separate from an increase in rent. Even if monthly rental contracts become more common, the rent for individual homes does not necessarily rise at the same rate.

The shift toward monthly rent should therefore be assessed by considering the monthly rental share, median monthly rent, deposit levels, jeonse prices, and transaction volume by housing size together.

Why Jeonse Is Declining and Monthly Rent Is Increasing

The shift toward monthly rent is difficult to explain solely through the preferences of either tenants or landlords. It is the result of housing supply, financial markets, and perceptions of risk acting simultaneously.

Some tenants may reduce their deposits to invest the remaining funds, but those returns cannot be treated as a certain trade-off against lower monthly rent. The possibility of investment losses, taxes, transaction costs, and liquidity risks must also be taken into account.

The Jeonse-to-Monthly-Rent Conversion Rate and How to Calculate Rent

The jeonse-to-monthly-rent conversion rate is the annualized rate applied when part of a jeonse deposit is converted into monthly rent. The basic formula is as follows.

Monthly converted amount = Deposit reduction × Annual jeonse-to-monthly-rent conversion rate ÷ 12

For example, if the deposit is reduced by 100 million won and an annual rate of 5.6% is applied, the calculation is as follows.

• Annual converted amount: 100 million won × 5.6% = 5.6 million won
• Monthly converted amount: 5.6 million won ÷ 12 = approximately 467,000 won

This calculation merely converts the difference in the deposit into monthly rent. In actual contracts, different amounts may be proposed based on the condition and location of the home, the contract period, maintenance fees, and the landlord’s bargaining power.

The Difference Between the Market Conversion Rate and the Statutory Conversion Cap

The regional jeonse-to-monthly-rent conversion rates published by the Korea Real Estate Board are statistical indicators showing the relationship between jeonse and monthly rent observed in the actual market. In contrast, the statutory cap on the jeonse-to-monthly-rent conversion rate under the Housing Lease Protection Act is a legal standard intended to protect tenants when a certain amount of the deposit is converted into monthly rent.

The statutory cap must be determined by checking the Bank of Korea’s base rate at the time of the contract and the current Housing Lease Protection Act and its Enforcement Decree. However, it is not a price list that uniformly determines monthly rent for new contracts, and legal review may be necessary depending on how the contract is modified and the circumstances in which it applies. The base rate at the time of the contract and the current laws and regulations must always be checked again.

How to Compare the Actual Costs of Jeonse and Monthly Rent

When comparing jeonse and monthly rent, deposits and monthly rent should not simply be placed side by side. At a minimum, the following items should be converted into annual costs.

1. 12 months of rent
2. Interest on loans used to finance the deposit
3. The opportunity cost of the tenant’s own funds committed to the deposit
4. Maintenance fees and separately charged services
5. Deposit guarantee insurance premiums, brokerage fees, and moving expenses
6. Costs that may arise upon early termination or renewal

For example, if monthly rent increases by 500,000 won in exchange for reducing the deposit by 100 million won, the nominal conversion rate is 6% per year. If the effective interest rate on a loan used to secure that 100 million won is higher than 6%, choosing a lower deposit may be advantageous. However, if the tenant has sufficient funds of their own or safe investment returns are low, a higher deposit may be more economical.

Household Cash Flow Stress Test

Before signing a monthly rental contract, it is advisable not only to consider current income but also to calculate whether expenses would remain manageable under the following circumstances.

• Interest rates rise, increasing loan interest
• Income temporarily declines
• Maintenance fees and utility charges increase
• Monthly rent or the deposit increases upon renewal
• The timing of the new deposit and the return of the existing deposit does not align when moving

Because monthly rent is a fixed expense paid every month, it is safer not to assume that it can be covered by uncertain income such as investment returns.

Why Corporate Rental Housing Is Growing and What to Check

As monthly rent becomes more common, tenants begin comparing housing services that include management, security, shared facilities, and contract stability rather than merely the physical space. This is also why professionally managed rental housing brands such as Remarkville and Episode are attracting attention.

Corporate rentals may provide standardized facility management, customer service channels, furniture and appliances, and community facilities. However, the cost of these services may be included in the rent or maintenance fees, and the fact that a brand is well known does not automatically guarantee the return of the deposit.

The following should be checked before signing a contract.

• Whether the owner listed in the property register matches the contracting party
• How the legal roles of the operator and landlord are distinguished
• Whether the property is eligible for deposit return guarantee coverage and whether it has actually been enrolled
• The respective amounts of the basic maintenance fee and optional service charges
• The penalty for early termination and the required notice period for moving out
• The standards for contract renewal, rent adjustments, and restoration to the original condition
• Who is responsible for breakdowns of furniture and appliances and accidents in shared facilities

Rather than simply categorizing private and corporate rentals as “unstable versus stable,” they should be compared using the same criteria: total housing costs, deposit protection, contract flexibility, and service quality.

What Is Missed When Monthly Rental Statistics Are Misread

Comparing monthly rent in Seoul with major global cities such as New York or London based only on monthly rental prices can distort the burden of living costs. This is because not only rental levels but also household income, housing size, deposit practices, maintenance fees, taxes, lease periods, and housing support systems differ.

Moreover, the shift toward monthly rent does not necessarily mean an upgrade in housing services. Even when tenants pay more in monthly rent, contract stability or housing quality may not improve. For tenants, the following measures of actual burden are more important than the share of monthly rental contracts.

• The proportion of disposable income spent on rent and maintenance fees
• Total housing costs, including the deposit
• The amount of space and commuting accessibility available for the same cost
• Average length of residence and the possibility of renewal
• The risks of deposit loss and forced relocation

Policy assessments should also measure housing cost burdens and contract stability by income group, age, and household size rather than looking only at the share of transactions.

Tenant Contract Checklist for the Monthly Rent Era

Even if monthly rent becomes the mainstream, the fundamentals of a good contract do not change.

1. Compare deposit and monthly rent combinations for the same apartment complex and unit size in the actual transaction price disclosure system.
2. Check ownership, mortgage liens, seizures, and other legal rights through the property register.
3. Check eligibility for deposit return guarantee coverage and any grounds for exclusion.
4. Calculate the deposit difference using the conversion rate and compare whether the proposed monthly rent is reasonable.
5. Check maintenance fee items and recent amounts paid, then add them to the monthly rent.
6. After moving in, complete the procedures needed to protect the deposit, including filing a move-in report and obtaining a fixed date.
7. Specify the terms for renewal, early termination, repairs, and restoration to the original condition in the special provisions.

The shift toward monthly rent is closer to a process in which rental options are being reorganized into various combinations of deposits and monthly rent than to the immediate disappearance of jeonse. Rather than choosing only between “jeonse or monthly rent,” tenants should compare deposit risk, monthly cash flow, total housing costs, and contract stability in a single table.