As ultra-high monthly rents expand, prices are also rising sharply in Seoul’s outer districts, according to an analysis of new apartment lease contracts. In the so-called “Nowon-Dobong-Gangbuk” area — long seen as a last affordable option for working-class residents — the share of contracts with monthly rent of 1 million won or more jumped over the past year, adding to concerns that housing costs are reaching a breaking point.
An analysis of new monthly-rent contracts for Seoul apartments signed from January through Tuesday, using the Transport Ministry’s public real-transaction price system, found a steep upswing in outer-district rents.
In Nowon, Dobong and Gangbuk districts, the shift toward higher monthly rents was pronounced in small- and mid-sized apartments. Of 2,322 new monthly-rent contracts in the area this year, 671 — or 28.9% — were for 1 million won or more a month. A year earlier, 543 of 2,431 contracts, or 22.3%, were at that level, meaning the share rose 6.6 percentage points.
Across Seoul, higher monthly rents also became more common. Of 18,733 new monthly-rent apartment contracts this year, 6,020 — 32.1% — were for 1.5 million won or more, up 3.4 percentage points from 28.7% a year earlier. The Korea Real Estate Board said Seoul’s average apartment monthly rent stood at 1.515 million won as of February, up 12.5% from a year earlier.
In the market, critics say tighter financial rules are pushing renters into expensive monthly leases. With loan restrictions last year lowering the jeonse loan limit for one-home owners to 200 million won and applying stricter debt service ratio rules, tenants with limited ability to raise large deposits have flowed into the monthly-rent market.
A real estate agent in Gangbuk said tenants often cannot cover the gap even after borrowing the maximum for a jeonse deposit, leaving them to look for listings with monthly rent above 1 million won. The agent said monthly-rent deals overtaking jeonse in working-class neighborhoods shows how difficult it has become to hold on in the jeonse market.
Supply constraints are also lifting rents, the report said. With all of Seoul designated as a land transaction permit zone, so-called gap investment has been blocked, and tighter owner-occupancy requirements have kept would-be rental units off the market.
According to the real estate big-data platform Asil, Seoul had 14,649 apartment monthly-rent listings as of Tuesday, down 31.4% from the start of the year. With fewer listings available, some landlords have increasingly passed tax burdens onto tenants through higher rents. KB Real Estate’s monthly rent price index, which rose gradually through June 2024, has climbed more steeply since last year, reaching 133.99 in March.
Nam Hyeok-woo, a researcher at Woori Bank’s real estate research center, said monthly rents remain strong because supply in the rental market is limited and new supply in non-apartment markets has fallen to its lowest level.
* This article has been translated by AI.
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