The average rent for apartments in Seoul has reached a record high of 730 million won, marking 39 consecutive months of increases. For the first time, the average rent in the northern districts of the city has surpassed 600 million won. The shortage of new rental listings, coupled with a rise in the proportion of renewal contracts among existing tenants, has led to a decrease in available rental properties, continuing to exert upward pressure on prices.
According to KB Real Estate, the average rent for Seoul apartments this month is 728.98 million won, the highest ever recorded. This represents a 9.5% increase from the end of last year, when the average was 665.98 million won. The rental prices in Seoul have been on the rise since August 2023, marking 39 consecutive months of increases.
The northern districts have officially entered the era of 600 million won rents. The average rent for apartments in the 14 northern districts is now 602.81 million won, exceeding 600 million won for the first time. In contrast, the average rent in the 11 southern districts has risen to 841.78 million won. The average rent in Gangnam surpassed 700 million won in August 2024, reaching 707.51 million won, and has since increased by nearly 40 million won in just four months.
This month, the average rent for apartments nationwide is 338.91 million won, still below the 341.88 million won recorded in June 2022. Compared to the average in Seoul, this figure is approximately 390 million won lower. While rental prices nationwide have not recovered to previous highs, Seoul continues to set record prices, widening the gap between regions.
As prices rise, the volume of rental listings is decreasing. According to KB Kookmin Bank's October housing market review, the rental supply index for September was 120.7, the highest level since the implementation of the Lease Protection Act in 2020. Analysts attribute the shortage of rental listings to a decrease in new move-ins and an increase in contract renewals among existing tenants.
Statistics from the Seoul city government also confirm the rising trend in renewal contracts. In September, the proportion of renewal contracts among all rental transactions was 56.7%, up 13.3 percentage points from 43.4% during the same period last year. The share of renewal contracts utilizing the right to request renewal increased to 52.1%, up 2.3 percentage points from the previous month.
The conversion rate from monthly rent to lease has also risen. This month, the conversion rate for Seoul apartments is 4.31%, the highest since October 2017. In the northern districts, the rate is 4.36%, while in the southern districts, it stands at 4.24%. As the conversion rate increases, the monthly rent burden for tenants also rises when converting the same amount of deposit into monthly rent.
The current period of rising rental prices in Seoul has surpassed the previous long-term increase. Previously, prices rose continuously for 38 months from May 2019 to June 2022, but now they have been increasing for 39 months. Factors such as the shortage of rental listings, decreased move-in volumes, and increased renewal contracts are cited as pressures on the market.
Industry experts analyze that the shortage of rental listings has led to rising prices. With an increase in landlords' actual residency, the supply of rental properties may decrease further, while limited move-in volumes and ongoing demand due to household fragmentation are expected to continue exerting upward pressure on rental prices.
* This article has been translated by AI.
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