The number of jeonse listings for apartments in Seoul has fallen below 20,000, making it increasingly difficult for tenants to find new homes. The average jeonse price has surpassed 700 million won, and nearly 60% of transactions are renewal contracts. As new rental options become scarce and deposit burdens increase, tenants are facing a narrowing path for housing. Although the government has introduced measures to enhance housing stability, such as expanding public rentals, critics argue that additional solutions are needed to address the supply-demand imbalance in the private jeonse market.
According to real estate big data firm Asil, the number of jeonse listings in Seoul this month stands at 19,904, a 5.9% decrease from 21,146 last month. Compared to the same period last year, when there were 22,966 listings, this represents a 13.3% decline.
In contrast, KB Real Estate reported that the average jeonse price for Seoul apartments reached a record high of 711.78 million won last month, up 59.99 million won (9.2%) from 651.79 million won in August of last year. After hitting a low of 569.81 million won in July 2023, prices have surged by more than 140 million won over the past three years.
Jeonse transactions have also decreased. An analysis by the Seoul city government of reported transactions up to the 15th of this month revealed that the number of jeonse transactions for Seoul apartments last month was 7,263, down 18.0% from 8,855 in the previous month and down 32.2% from the same month last year. While the reporting deadline is still open, the city anticipates that the downward trend will continue compared to the previous year.
Amid the declining transactions, the proportion of renewal contracts has actually increased. Last month, 58.9% of jeonse contracts in Seoul were renewals, up 5.9 percentage points from 53.0% in July and 15.2 percentage points from 43.7% in the same month last year. This means that nearly 6 out of 10 contracts were renewals for existing homes.
Market analysts suggest that a combination of reduced new housing supply and stricter policies on actual residency are contributing to the decline in jeonse listings. Restrictions on purchasing homes with tenants and owners moving into their rental properties can lead to a decrease in jeonse supply. Reports indicate that tenants are often signing contracts without thoroughly inspecting properties, as listings are quickly taken.
A real estate agent in Nowon District stated, “The lack of jeonse listings is largely due to the designation of land transaction permission zones. Only properties that were previously rented out are available as jeonse, but even those are decreasing as existing rental homes are being sold.”
The government is also taking steps to alleviate tenants' housing insecurity. One notable measure is the expansion of the grace period for actual residency requirements when purchasing homes occupied by tenants in designated areas. While this may help maintain existing rental relationships, critics argue it is unlikely to significantly increase the supply of new jeonse listings.
In the housing stability plan announced on the 21st, the government aims to supply 1.19 million public housing units by 2030 and establish a new long-term private rental type. While these measures are intended to enhance housing stability for tenants in the medium to long term, there will inevitably be a lag in increasing supply in Seoul's private jeonse market.
In the gaps of these policies are tenant households that cannot wait for public rental availability and are struggling with soaring housing prices in Seoul. Even when seeking new jeonse homes, they face dwindling listings and rising deposits, forcing them to either renew contracts in their current homes or find additional funds. Abandoning jeonse means facing the burden of monthly rent.
Ham Young-jin, head of the real estate research lab at Woori Bank, noted, “The increase in monthly rentals and the use of renewal contract rights are also contributing to the decline in new jeonse listings. Policy measures are needed to prevent a contraction in private rental supply.”
* This article has been translated by AI.
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