▲ AI PRISM* Personalized Economic Briefing
* Editor's note: AI PRISM (Personalized Report & Insight Summarizing Media) is an artificial intelligence-based personalized news recommendation and summary service developed with support from the Korea Press Foundation. It selects and provides six news items tailored to each reader type.
[Key Issue Briefing]
■ Shift from jeonse to monthly rent accelerates: Monthly rent accounted for 51.0% of the 172,027 apartment lease transactions in Seoul from January through September, surpassing jeonse (a Korean lease system requiring a large lump-sum deposit instead of monthly rent) for the first time since the data series began in 2011. Jeonse transactions plunged 27.5% over the period, while monthly rent contracts fell just 2.8%, pointing to a rapid structural shift in the rental market.
■ Questions over land transaction permit system: Of 66,276 applications for land transaction permits involving homes across Seoul's 25 districts from October last year through August, only 71 were rejected or returned, leaving an approval rate of 96.6%. In six districts including Nowon, not a single application was denied despite a combined 22,790 filings, prompting criticism that the system adds administrative burden while doing little to curb speculation.
■ Call for a supply blitz: President Lee Jae-myung instructed officials at a Cabinet meeting on the 20th to mobilize every available option, including presales of undeveloped land, modular housing and shorter permit timelines. Housing permits in Seoul fell about 63% over a decade, from 113,000 units in 2015 to 42,000 last year, leading to forecasts that supply will normalize only after 2028.
[News of Interest to Real Estate Investors]
1. Monthly Rent Tops 50% of Seoul Apartment Leases for First Time
Key summary: Monthly rent contracts for Seoul apartments totaled 87,740, or 51.0%, from January through September, exceeding jeonse contracts (84,287) for the first time. That is up 7.3 percentage points from 43.7% in the same period last year, with the drop in jeonse transactions roughly 10 times that of monthly rent. The number of districts where monthly rent outpaced jeonse widened to 13 this year from four last year, with monthly rent also overtaking jeonse in high-priced residential areas such as Gangnam (54.0%), Yongsan (56.9%) and Mapo (54.1%). Analysts attribute the accelerating shift to a sharp drop in jeonse listings caused by fewer new move-ins, tighter residency requirements and the ban on gap investment — buying a home while a tenant's jeonse deposit covers most of the price — compounded by restrictions on jeonse loans.
2. Only One in 1,000 Permit Applications Denied, Raising Doubts
Key summary: An analysis by The Seoul Economic Daily of Seoul city data obtained through the office of Rep. Kim Mi-ae of the National Assembly's Land, Infrastructure and Transport Committee found that only 71 of 66,276 applications for land transaction permits involving homes, or 0.1%, were rejected or returned from October last year through August. Average processing times reached 14 working days in Nowon District and 12 in Songpa District, and a shortage of dedicated staff makes it practically impossible to directly investigate thousands of transactions a year. Seoul Mayor Oh Se-hoon also said residency requirements could worsen the shortage of rental housing and push up sale prices, adding that "a decision is needed." Gyeonggi Province last month asked the central government to lift permit requirements outside the areas covered by the Aug. 13 housing supply plan and to apply them at the town and neighborhood level, and the government plans to watch market conditions through year-end before deciding whether to extend the measures.
3. 2.15 Million Won a Month for a 59㎡ Unit in Mia-dong as High Rents Spread to Northern Seoul
Key summary: From January through the 20th of this month, apartment lease contracts with monthly rent of 3 million won or more in Nowon, Dobong and Gangbuk districts numbered 13, more than six times the two recorded in the same period last year. Contracts with monthly rent of 2 million won or more rose 2.4 times over the same period, to 160 from 67, while Gangbuk District saw a more than fourfold jump to 68 from 16. Average monthly rent for a Seoul apartment stood at 1.661 million won as of September, up 15.1% from 1.443 million won a year earlier, with five districts posting gains above 20%, including Gwangjin (23.3%), Yeongdeungpo (22.5%) and Songpa (22.4%). Experts said stabilizing the rental market will be difficult without easing the rules, noting that the three tenant protection laws, residency requirements in land transaction permit zones and heavier taxes on multiple-home owners have combined to choke off the private rental housing pipeline.
[Reference News for Real Estate Investors]
4. President Lee Orders Full Use of Undeveloped-Land Presales and Modular Housing
Key summary: President Lee Jae-myung called at a Cabinet meeting on the 20th for a "supply blitz," directing officials not to be bound by existing practices and procedures and to shorten as much as possible the time from site preparation to groundbreaking. Presales of undeveloped land supply sites before site preparation is complete, allowing development and construction preparations to proceed in parallel and shortening the supply timeline, while modular housing shortens construction by manufacturing major components in factories and assembling them on site. With housing permits in Seoul down to about 42,000 units last year and a supply gap accumulating, forecasts suggest normalization will come only after 2028. Experts advised that faster supply be paired with efforts to secure housing quality and livable conditions.
5. Construction Halted at Yongsan's Asia Apartments, Clouding Year-End Presale
Key summary: Construction of the new complex in the Asia Apartments special planning district on Hangang-ro in Seoul's Yongsan District was officially halted as of the 11th of last month, with the resumption date listed as "undetermined." The project, which would rise up to 36 floors above ground with 997 units, including 847 for general presale, is stalled over a third revision to its business plan amid a dispute on design standards for 150 units of staff housing for the U.S. Embassy in Seoul, provided as a public contribution. Booyoung Group Chairman Lee Joong-keun has pledged to normalize the project and begin presales this year, but observers say groundbreaking and a general presale this year — and even the February 2028 completion target — are likely to slip indefinitely. The industry views the matter as a complex one entangled with diplomatic coordination between the Korean and U.S. governments, and expects the timing of approval for the third business plan revision to reshape the overall calculus, including cost increases and presale pricing.
6. Dongja-dong Jjokbang Village Designated Public Housing District for 2,150 Units
Key summary: The Ministry of Land, Infrastructure and Transport on the 21st designated and announced the area around the jjokbang village — a cluster of tiny single-room dwellings — in Dongja-dong, Yongsan District, Seoul, as a public housing district, finalizing plans for 2,150 units in total, including 1,000 public rental units and 1,150 for sale. The project, announced in 2021 but delayed by opposition from landowners, sits in a core downtown location next to Seoul Station and targets groundbreaking in 2029 and completion and move-in in 2032. Rules will be revised so that a household holding a single presale right received as in-kind compensation can claim benefits such as the long-term residence special deduction when transferring that right, and a profit-sharing housing option for in-kind compensation will be introduced next month for residents who lack the means to pay their share of costs. Private builders will also be allowed to join as co-developers of public housing projects, which is expected to speed up the work.
