Seoul Area Jeonse Supply-Demand Imbalance Hits Worst Level in Five Years

The jeonse rental market in the Seoul metropolitan area is showing a supply-demand imbalance approaching the level seen during the 2020 jeonse crisis. With Seoul’s jeonse supply-demand index at its worst level in five years, more households unable to secure leases are shifting to buying midpriced homes in Seoul or apartments in nearby Gyeonggi Province.
 
According to KB Real Estate statistics released on the 5th, the monthly jeonse supply-demand index for the capital area (Seoul, Gyeonggi and Incheon) stood at 176.8 last month, the highest since August 2021 (179.1). Incheon posted 181.4, its highest since October 2021, while Gyeonggi came in at 175.1, reaching a critical level for the first time in 56 months since August 2021.
 
In Seoul, the index for the city’s 14 northern districts rose to 187.2 last month, the highest since November 2020 (190.7), a 65-month high.
 
The shortage is also visible in listings. Asil data show that the Boram Apartments complex in Sanggye-dong, Nowon-gu, with about 3,315 households, had zero jeonse listings as of that day. A local broker said the remaining listings — fewer than five — were all taken by the end of last month.
 
SK Bukhansan City in Gangbuk-gu, a 3,830-household complex, had only two registered jeonse listings. The article attributes the decline in rental supply to tighter owner-occupancy requirements after the Oct. 15 measures, which designated all of Seoul as a land transaction permit zone.
 
Jeonse prices are rising quickly. KB Real Estate data show the average jeonse deposit for Seoul apartments reached 681.47 million won last month, the highest since the series began. Gangbuk-gu’s jeonse price increase in April was 3.86%, a record. Seongbuk-gu (1.86%), Seongdong-gu (1.32%) and Gwanak-gu (1.31%) also posted monthly gains of more than 1%.
 
The squeeze is accelerating a shift from jeonse demand to homebuying in nearby Gyeonggi cities. In March, sale prices jumped in Anyang’s Dongan-gu (up 2.73%), Gwangmyeong (up 2.65%) and Hanam (up 2.40%). The article says the dominant view is that the surge reflects “survival buying” by end users fleeing the rental crunch, rather than pure investment demand.
 
Despite concerns in the market, the government struck an optimistic tone. Kim Yong-beom, the presidential office’s policy chief, said at a briefing on the 4th that it was “highly unusual” to see prices falling in the so-called “warm spots” such as Seoul’s three Gangnam districts and Yongsan, calling it evidence the market is moving toward normalization. He added that rising prices in outlying areas were not a major concern because apartments priced under 1.5 billion won are seeing substantial purchases by younger end users.
 
The government also said it would maintain the long-term holding special deduction while considering a redesign focused on actual occupancy, a move intended to reduce benefits for periods when owners do not live in the home. Some observers warned it could further reduce rental listings.
 
Nam Hyeok-woo of Woori Bank’s Real Estate Research Center said supply conditions, including the availability of jeonse and monthly-rent listings, have an outsized impact on the midpriced market. “The price strength now seen in Seoul’s lower- and mid-tier areas will spread to nearby Gyeonggi areas where rental listings are also scarce,” he said, urging policymakers to consider measures to expand non-apartment supply, including increased purchases of non-apartment housing.



* This article has been translated by AI.

Copyright ⓒ Aju Press All rights reserved.