Monthly rent has overtaken jeonse (a lump-sum deposit lease) in Seoul's apartment rental market. With few new homes ready for occupancy, tighter owner-occupancy requirements and a ban on gap investment — buying a home while a tenant's jeonse deposit covers most of the price — jeonse listings have thinned sharply, and more than half of this year's lease contracts have been monthly rent deals. Jeonse transactions fell nearly 30% from a year earlier, and monthly rent now outnumbers jeonse in more than half of Seoul's 25 districts. Analysts say the shift from jeonse to monthly rent is accelerating, pushing up housing costs for low- and middle-income households.
Jeonse Listings Dry Up as Prices Climb
Of the 172,027 apartment lease contracts signed in Seoul from January through September, 87,740, or 51.0%, were monthly rent deals, according to the Seoul Real Estate Information Plaza. That is 7.3 percentage points higher than the 43.7% recorded in the same period last year, and the first time the nine-month cumulative share has exceeded half since the data series began in 2011. The annual share hit a record 44.5% last year and now looks likely to top 50% for the first time.
The rising share reflects a steep drop in jeonse activity. Jeonse contracts in Seoul totaled 84,287 in the first nine months, down 27.5% from 116,272 a year earlier. Monthly rent deals fell just 2.8%, to 87,740 from 90,310. The decline in jeonse contracts was roughly 10 times that of monthly rent deals.
The number of districts where monthly rent exceeds jeonse is also growing quickly. In the first nine months of last year, only four districts — Jongno, Jung, Geumcheon and Guro — saw more monthly rent deals than jeonse. This year the count rose to 13. Jongno had the highest share at 65.6%, followed by Jungnang at 64.9%, Guro at 63.1% and Jung at 59.6%. Monthly rent also outpaced jeonse in Gangnam at 54.0%, Yongsan at 56.9% and Mapo at 54.1%.
Rents of 2 Million to 3 Million Won a Month Spread to Northern Seoul
As the monthly rent share climbs, contracts above 3 million won a month — once confined to luxury complexes in the Gangnam area — are appearing in northern Seoul, adding to tenants' costs. Rents are rising especially fast in Nowon, Dobong and Gangbuk on the city's outskirts, districts where housing costs had been relatively low, leaving households that do not own a home with less stable footing.
From January through the 20th of this month, 13 apartment leases above 3 million won a month were signed in Nowon, Dobong and Gangbuk, according to the Ministry of Land, Infrastructure and Transport's actual transaction price disclosure system. That is more than six times the two recorded in the same period last year. Gangbuk and Nowon each rose to six from one, and Dobong logged such contracts for the first time after recording none last year.
An 84-square-meter unit at Kkumeunsup Kolon Haneulchae in Jangwi-dong, Seongbuk, was leased on the 8th for a 40 million won deposit and monthly rent of 3.25 million won. The same day, an 84-square-meter unit at Cheongnyangni Station Hanyang Sujain Graciel in Jeonnong-dong, Dongdaemun, went for a 50 million won deposit and 3.7 million won a month. A 115-square-meter unit at Shindonga in Junggye-dong, Nowon, was leased on the 17th for a 300 million won deposit and 3.4 million won a month.
Rents above 2 million won a month are spreading faster still. From January through the 20th, Nowon, Dobong and Gangbuk recorded 160 such contracts, 2.4 times the 67 logged a year earlier. Gangbuk saw the sharpest jump, to 68 from 16. Nowon rose to 72 from 42, and Dobong to 20 from nine.
A 59-square-meter unit at Mia Dongbu Centreville in Mia-dong, Gangbuk, was leased on the 3rd for a 50 million won deposit and 2.15 million won a month. An 84-square-meter unit at Hagye 2 Hyundai in Hagye-dong, Nowon, went on the 16th for a 100 million won deposit and 2.3 million won a month. An 84-square-meter unit at Bukhansan Kolon Haneulchae in Ssangmun-dong, Dobong, was leased on Sept. 11 for a 50 million won deposit and 2.2 million won a month. At 2.2 million won a month, annual rent alone comes to 26.4 million won, meaning an employee taking home 4.4 million won a month would spend half of that income on housing.
Seoul's Average Monthly Rent Rises 15% in a Year, With Nowon Up 18%
High rents are no longer limited to a handful of complexes. Seoul's average apartment monthly rent was 1.661 million won in September, up 15.1% from 1.443 million won a year earlier, according to the Korea Real Estate Board. The median rent rose to 1.4 million won from 1.2 million won. All 25 districts posted increases, and five topped 20%: Gwangjin at 23.3%, Yeongdeungpo at 22.5%, Songpa at 22.4%, Gangdong at 21.8% and Seongbuk at 20.2%.
The pace on the city's fringes is drawing particular attention. Nowon's average monthly rent jumped 18.5% in a year, to 1.069 million won from 902,000 won. Over the same period, Dobong rose to 1.054 million won from 945,000 won, and Gangbuk to 1.336 million won from 1.175 million won. With both high-end deals and ordinary rent levels climbing, tenants looking for cheaper places to live have fewer options.
Analysts say tenants' circumstances are worsening as jeonse listings shrink and monthly rent burdens grow. "Unlike past periods of rising jeonse prices, what we are seeing now is a structural shift in the rental market from jeonse to monthly rent," said Nam Hyuk-woo, a researcher at Woori Bank's real estate research institute. "With a shortage of new jeonse supply compounded by existing jeonse listings converting to monthly rent, the shift toward monthly rent could accelerate further."
Experts Call for Easing Rules to Expand Rental Supply Quickly
The root cause of the squeeze — the shift to monthly rent and the spread of high rents — is a shortage of rental listings. New apartment move-ins are declining while more existing tenants renew their contracts, leaving fewer jeonse listings on the market. Owner-occupancy requirements under land transaction permit zone rules, applied across Seoul last October, are also cited as a constraint on jeonse supply. The jeonse supply-demand index last month hit its highest level since the three tenant protection laws took effect in 2020, according to the KB Financial Group Research Institute. With jeonse listings scarce and lending rules tight, tenants are being pushed into monthly rent.
Experts say expanding private rental housing supply is needed to resolve the imbalance. "The three tenant protection laws, owner-occupancy requirements in land transaction permit zones and heavier taxes on multiple-home owners have combined to block the private rental supply chain," said Seo Jin-hyung, a professor of real estate law at Kwangwoon University. "Simply increasing supply of new apartments without fixing those rules will not stabilize the rental market." Kwon Dae-joong, a chair professor of economics and real estate at Hansung University, said long-term apartment supply plans alone cannot resolve the immediate squeeze. "We need to move quickly to expand private rental stock by broadening the exclusion from home-count rules to cover not only newly built officetels and villas (low-rise multi-unit housing, distinct from Western-style luxury villas) but older ones as well," he said.
