An 84-square-meter unit at the Dream Forest Kolon Haneulchae complex in Jangwi-dong, Seongbuk-gu, Seoul, was leased on the 8th of this month for a deposit of 40 million won 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-gu, was leased for a 50 million won deposit and 3.7 million won in monthly rent. A 115-square-meter unit at the Shindonga complex in Junggye-dong, Nowon-gu, was leased on the 17th for a 300 million won deposit and 3.4 million won a month.
High-end monthly rent contracts above 3 million won, once confined to luxury apartments in the Gangnam area, are now appearing across northern Seoul, adding to tenants' housing cost burden. Stricter owner-occupancy requirements and curbs on gap investment — buying a home while a tenant's jeonse deposit covers most of the price — have sharply reduced the supply of jeonse, a lump-sum deposit lease, while lending restrictions on jeonse loans have made it harder for tenants to raise deposits, pushing more of them toward monthly rent. Rents are climbing especially fast in outlying districts such as Nowon, Dobong and Gangbuk, where housing costs had been relatively low, deepening housing insecurity for low- and middle-income households that do not own a home.
An analysis of transaction data from the Ministry of Land, Infrastructure and Transport released on the 20th found that 13 apartment leases with monthly rent of 3 million won or more were signed in Nowon, Dobong and Gangbuk from January through the 20th of this month. That is more than six times the two recorded in the same period last year. Gangbuk and Nowon each rose to six contracts from one, and Dobong recorded contracts above 3 million won after having none a year earlier.
Leases above 2 million won a month are also spreading quickly. From January through the 20th of this month, the three districts recorded 160 such apartment leases, 2.4 times the 67 logged in the same period last year. 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-gu, was leased on the 3rd of this month for a 50 million won deposit and 2.15 million won in monthly rent. An 84-square-meter unit at Hagye 2 Hyundai in Hagye-dong, Nowon-gu, was leased 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-gu, 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 comes to 26.4 million won, meaning a worker taking home 4.4 million won a month would spend half of that income on housing.
The high rents are not limited to a handful of complexes. Average monthly rent for apartments in Seoul 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. Average rents increased in all 25 of Seoul's districts, with five posting gains above 20%: Gwangjin at 23.3%, Yeongdeungpo at 22.5%, Songpa at 22.4%, Gangdong at 21.8% and Seongbuk at 20.2%.
The increases on the city's fringes are especially steep. Average monthly rent in Nowon jumped 18.5% over the 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 leases and general rent levels rising, tenants searching for relatively affordable housing have fewer options.
The root cause of the shift from jeonse to monthly rent and the rise in high-end leases is a shortage of rental listings. New apartment completions are declining, and more existing tenants are renewing their contracts, leaving fewer jeonse units on the market. Owner-occupancy requirements tied to land transaction permit zones, applied across all of Seoul in October last year, are also cited as constraining jeonse supply. The jeonse supply-demand index last month reached its highest level since the three tenant protection laws took effect in 2020, according to the KB Financial Group Research Institute. With listings scarce and lending rules tightened, tenants are being pushed into monthly rent.
Experts say expanding private rental housing supply is needed to ease the imbalance. Seo Jin-hyoung, a professor of real estate law at Kwangwoon University, said the pipeline for private rental housing has been blocked by a combination of the three tenant protection laws, owner-occupancy requirements in land transaction permit zones and heavier taxes on multiple-home owners. "Without improving those rules, it will be difficult to stabilize the rental market by increasing new apartment supply alone," the professor said. 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 rental crunch. "Rules that exclude properties from the count of homes owned should be expanded to cover not only newly built but also older non-apartment housing, such as officetels — studio units used as either a home or an office — and villas, low-rise multi-unit homes, to quickly increase private rental supply," the chair professor said.