As rental prices continue to rise, tenants seeking new leases for the same apartment and size are facing significantly higher deposit burdens. In Seoul, the difference in lease deposits between new contracts and renewals has reached as much as 80 million won for apartments with a standard area of 84 square meters.
According to a report from Zigbang on July 6, an analysis of apartment rental transactions in the metropolitan area from January to June this year shows that the gap between new contracts and renewals is widening, particularly in Seoul.
This analysis focused on cases where both new contracts and renewals occurred within the same complex and for the same size, comparing the median transaction deposits. The study included apartments of 59 square meters and 84 square meters, excluding monthly rental agreements.
In Seoul, the difference in lease deposits between new contracts and renewals has grown the most in the metropolitan area. For 59 square meter apartments, the deposit gap increased from 35 million won in January to 77.5 million won in June, more than doubling. During the same period, the deposit for new contracts rose from 500 million won to 547.5 million won, while the increase for renewals was limited, moving from 465 million won to 470 million won.
The gap for 84 square meter apartments was even larger, expanding from 43.75 million won in January to 80 million won in June. The deposit for new contracts increased from 656.25 million won to 700 million won, while renewals remained relatively stable, rising from 612.5 million won to 620 million won.
In Gyeonggi Province, the burden of new contracts is also increasing. The deposit difference for 59 square meter apartments grew slightly from 20 million won to 22 million won, while for 84 square meters, it surged from 10.5 million won to 51 million won. The deposit for new contracts rose from 400 million won to 450 million won, whereas renewals increased from 389.5 million won to 399 million won, showing a smaller rise.
In contrast, Incheon showed a relatively smaller gap. As of June, the deposit difference for 59 square meter apartments was 9.5 million won, and for 84 square meters, it was 7.12 million won, the lowest in the metropolitan area.
As the burden of rental prices increases, existing tenants are increasingly opting for renewals. In Seoul, the proportion of new contracts dropped from 52.6% in January to 45.0% in June, while the share of renewals rose from 47.4% to 55.0%, surpassing new contracts since April. Gyeonggi Province also saw an increase in the renewal share from 38.6% to 45.4% during the same period.
Zigbang explained that new contracts reflect current market prices immediately, while renewals are influenced by the terms of existing contracts. In particular, when the right to request a contract renewal is applied, the increase in rent is limited, which can further widen the deposit gap between new contracts and renewals.
With a recent shortage of rental listings and rising rental prices, the burden of deposits required for new contracts has increased, along with moving costs and brokerage fees, leading to a higher preference for renewals among existing tenants.
As the proportion of renewals continues to rise, particularly in Seoul and Gyeonggi Province, it is expected that the gap in deposits between new contracts and renewals will likely continue to widen as rental prices remain strong.
Meanwhile, renewal contracts are also on the rise. According to the Ministry of Land, Infrastructure and Transport, the proportion of renewal contracts for apartments in Seoul from January to May this year was 46.0%, an increase from 40.5% during the same period last year. Notably, the share of renewal contracts for leases exceeded half, with 51.3% for leases and 52.8% for the use of the right to request a contract renewal.
* This article has been translated by AI.
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