BACKGROUND

Earlier "share houses" in Korea failed to attract a wide group of young adults due to a lack of privacy in shared living rooms, kitchens, and bathrooms. In response, coliving was introduced around 2015. This new model ensures that each resident has private spaces while still offering shared amenities like fitness centers, large kitchens, dining areas, lounges, and cinemas, combining privacy with communal conveniences.

According to Statistics Korea, the proportion of single-person households in South Korea has been steadily increasing, reaching 34.5% of all households in 2022. Additionally, projections indicate that although the total number of households is expected to decrease after peaking in 2040, the proportion of single-person households is anticipated to continue rising, reaching approximately 39.6% by 2050. The rising number of single-person households has accelerated the demand for small housing units  tailored to their needs.

RECENT TRENDS

In Korea, young professionals and singleperson households generally prefer the jeonse system, where an upfront lump-sum deposit is paid instead of monthly rent over a period of two years. This system is favored because the interest on bank loans for the deposit is typically cheaper than monthly rent thanks to government support, letting tenants to save for future homeownership. However, a major disruption known as "jeonse fraud" arose during the 2021 housing market downturn, exacerbated by rising interest rates. This led to landlords having difficulty returning the full, if any, amount of the deposits to tenants. As a result, demand for jeonse contracts declined significantly. By 2022, monthly rental transactions in Seoul surpassed jeonse agreements, with a notable increase in monthly rentals for non-apartments.