Seoul Jeonse Freeze... Jeonse Prices Soar as 60% of Listings Disappear in Nowon and Jungnang [Real Estate AtoZ]

Total Jeonse Listings in Seoul Drop to 17,000 Range
Down 26.4% Compared to Three Months Ago
Faster Depletion of Listings in Outer Districts
Accelerating Shift to Monthly Rent... Higher Housing Cost Burden

In areas with a high concentration of mid-priced apartments in the 200 to 400 million won range, such as Nowon-gu and Jungnang-gu, 60% of jeonse (long-term deposit lease) listings have disappeared over the past three months. Across Seoul as a whole, the number of jeonse listings has dropped to around 17,000. As listings rapidly decrease in these regions, jeonse prices are soaring and the conversion to monthly rent is accelerating, further increasing the housing cost burden for tenants.

According to real estate big data provider Asil on March 20, the total number of jeonse listings in Seoul as of the previous day was 17,136, a 26.4% decrease compared to three months ago (23,263 listings). The number also fell by more than 3% compared to just one week ago.

By autonomous district, the depletion of listings is fastest in the outskirts of Seoul. The largest decline in the number of jeonse listings over the past three months was seen in Nowon-gu, where listings dropped from 697 to 265, a 62.0% decrease. This was followed by Jungnang-gu, with listings decreasing from 158 to 66 (down 58.3%), then Guro-gu (-56.8%), Geumcheon-gu (-56.5%), and Mapo-gu (-55.1%), in descending order of decrease.

At large apartment complexes, rental properties are disappearing, especially in areas supported by strong demand for school districts. For example, although Boram Apartment in Sanggye-dong, Nowon-gu, is a large complex with 3,315 units, only 123 are listed for sale, and just 19 are available for rent—11 for jeonse and 8 for monthly rent. At Junggye Green Apartment in Junggye-dong, only 12 out of 3,481 units are available for rent—5 for jeonse and 7 for monthly rent. At Junggye Rainbow Apartment, there are no jeonse listings left, and only 4 units are listed for monthly rent.

As listings dwindle, the upward trend in jeonse prices is becoming more pronounced. According to the Korea Real Estate Board, the cumulative change in jeonse prices for Seoul apartments by the third week of March (as of the 16th) was 1.30% since the beginning of the year, more than six times the rate during the same period last year (0.21%).

Nowon-gu’s cumulative jeonse price change so far this year was 2.12%, significantly higher than Seoul’s average of 1.30%. Compared to the same period last year (0.29%), the rate of increase has accelerated more than sevenfold. Gwanak-gu (1.22% this year, -0.11% last year), Guro-gu (1.14% this year, -0.19% last year), and Geumcheon-gu (1.04% this year, -0.07% last year) all saw jeonse prices decline during the same period last year, but have now shifted to increases of over 1%. Jungnang-gu (0.71% this year, 0.06% last year) has seen its rate of increase expand more than tenfold. In Dobong-gu, the weekly rate of increase jumped from 0.03% in the third week of February to 0.31% in the third week of March, a tenfold jump in just one month.

The shortage of jeonse listings and rising prices are driving the lease market towards monthly rent. According to the Ministry of Land, Infrastructure and Transport’s official transaction disclosure system, the proportion of new apartment lease contracts in Seoul that were monthly rent from January 1 to March 20 this year was 52.3%, up 7.3 percentage points from the same period last year (45.0%).

The burden of housing costs for tenants is also increasing. During the same period, the average deposit for new monthly rent contracts was 188 million won, up 7.1% from last year’s 175.48 million won, and the average monthly rent rose 10.7% to 1.35 million won from last year’s 1.22 million won.

Market watchers predict that as the spring moving season, when demand is concentrated, gets into full swing, the instability in apartment rental prices may intensify even further.

Yoon Sumin, a real estate expert at NH Nonghyup Bank, said, "With demand concentrated and the supply of apartment jeonse limited, increases in jeonse prices have become inevitable." Yoon also noted, "The apartment rental market is shifting to an inelastic structure that is directly exposed to supply fluctuations."

In particular, the rising published value of properties has increased the likelihood that landlords will pass on the tax burden to tenants. Park Wongap, Chief Real Estate Specialist at KB Kookmin Bank, said, "As jeonse prices continue to rise, tenants who lack sufficient funds have no choice but to opt for 'half-jeonse,' in which they pay the increased portion of the deposit as monthly rent. In Seoul, where supply is insufficient and landlords have strong bargaining power, there is a high possibility that the increased property tax burden will be passed on to tenants."

This content was produced with the assistance of AI translation services.