"I'll raise the deposit"... 7 out of 10 lease renewals involve an increase

[Financial News] Amid the deepening lease crisis with rapidly rising lease prices, cases of 'increased renewal' where the deposit is raised while extending existing contracts are surging.
On the 27th, real estate brokerage firm Jiptos analyzed the Ministry of Land, Infrastructure and Transport's monthly lease transaction data and revealed that out of 68,932 nationwide lease renewal contracts in the first quarter of this year, 69%, or 47,852 cases, were increased renewal contracts. This is a 41% increase compared to the previous quarter (33,903 cases) and a 73% surge compared to the same period last year (27,569 cases). The total number of renewal contracts also increased by 11% to 68,932 cases compared to the same period last year (62,093 cases). It is interpreted that more tenants are choosing renewal contracts instead of moving, even if the lease deposit is increased.
By housing type, the increase in apartment renewal with increased deposits was notable. The proportion of increased renewal in nationwide apartment renewal contracts hit a low of 37% in the third quarter of 2023 and steadily rose to 75% in the first quarter of this year. In contrast, the proportion of 'decreased renewal' where the deposit is lowered for re-contracts sharply declined from 46% to 4% during the same period.
As the burden of increased lease deposits grows, the use of 'renewal request rights' that can limit the rent increase to within 5% is also surging. In the first quarter of 2025, 42,362 nationwide lease renewal contracts used the renewal request rights, a 38% increase from the previous quarter (30,688 cases) and a 47% increase from the same period last year (28,745 cases). It appears that tenants are actively utilizing this as a way to minimize housing cost burdens amid the steep lease price rise.
Lee Jae-yoon, CEO of Jiptos, analyzed, "Recently, the shortage of lease listings and the rising price trend are increasing the burden on tenants not only in new contracts but also in renewal contracts," adding, "Especially in the apartment market, the proportion of increased renewals is very high, leading many to choose to stay in existing homes and raise the deposit instead of moving."
He continued, "As the instability in the lease market persists, the increase in increased renewals and the use of renewal request rights is likely to continue for the time being," and added, "Tenants need to pay more attention to changes in contract terms."

ming@fnnews.com Min-kyung Jeon Reporter