Despite an increase in the number of apartments expected to be available in Seoul in the second half of the year compared to last year, experts predict that instability in the rental market will persist. Even with new units coming online, areas that have already seen significant increases in lease prices are likely to experience supply shortages, and the overall availability of rental listings is decreasing, leading to a continued perception of scarcity.
A cross-analysis of expected apartment supply for the second half of the year by Real Estate 114 and rental price statistics from the Korea Real Estate Agency reveals that many areas anticipated to face supply shortages are already experiencing steep increases in rental prices.
As of this year, the cumulative rental price increase in Nowon-gu has reached 6.50%, the highest among Seoul's districts, significantly up from just 0.86% during the same period last year. However, Nowon-gu is expected to have no new apartments available in the second half of the year.
Similarly, while rental prices in Dobong-gu have risen by 5.34% this year, there will be no new units available in the second half. Yeongdeungpo-gu has seen a 4.18% increase in rental prices with no new apartments expected, and Yangcheon-gu has experienced a 3.36% rise in rental prices while also facing a complete halt in new supply.
Areas with significant decreases in new supply are also showing strength in the rental market. Songpa-gu, which is expected to see the largest drop in new units this second half, has recorded a 5.16% increase in rental prices this year. Dongdaemun-gu is facing an 88.6% reduction in new units compared to the first half, while rental prices have risen by 4.45%. Gangdong-gu is experiencing an 89.1% decrease in new supply, with rental prices up by 3.97%.
The decline in existing rental listings is also a concern. According to real estate big data firm Asil, the number of rental listings for Seoul apartments has dropped to 19,541, down over 22% from 25,151 a year ago. This suggests that even if new units become available, a lack of sufficient existing rental listings may limit any perceived improvement in supply.
Experts emphasize that the focus should be on the anticipated decrease in supply next year rather than just the increase in new units this year. The ongoing decline in new construction and the expansion of actual residency are contributing to a reduction in available rental inventory in the market. If regional supply shortages continue, there are concerns that the imbalance in supply and demand could extend beyond the fall moving season, affecting the entire rental market in Seoul.
Lee Eun-hyung, a researcher at the Korea Construction Policy Institute, stated, "For housing supply to stabilize the market, there needs to be a meaningful and consistent supply of units that are actually available for occupancy. In a diverse market like Seoul, an increase in supply in one area does not necessarily lead to price stabilization across the board."
Song Seung-hyun, CEO of Urban and Economy, added, "While the increase in new units is certainly positive, the absolute scale of supply remains insufficient. The expansion of land transaction permit zones and a focus on actual residency are reducing existing rental listings, making it difficult to expect stability in the rental market from new supply alone."
He further noted, "Both new supply and the smooth circulation of existing inventory are necessary to achieve a balance in supply and demand. In a situation where there are significant regional disparities in supply, localized rental instability is likely to continue, which could also impact the sales market."
* This article has been translated by AI.
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