New apartment move-ins in Seoul next year will be concentrated in the Gangnam area, while relocation demand from redevelopment and rebuilding projects is clustered in the southwest, deepening district-level mismatches in the rental market. Citywide, move-in supply exceeds relocation demand. But in the southwestern zone, which includes Yeongdeungpo, Yangcheon and Dongjak districts, relocations amount to 3.4 times the number of new units ready for occupancy. Households forced to vacate existing homes for redevelopment projects are rising, while new housing supply to absorb them falls short, raising concerns of growing instability in the lease market.
Next year, Seoul will see 16,731 units in multifamily complexes of 30 or more households ready for occupancy, excluding youth housing, against 13,446 households relocating for redevelopment projects, according to data from the Korea Real Estate Board and the office of Rep. Jeon Yong-gi of the Democratic Party of Korea released on the 11th. Supply outpaces demand in aggregate, but the gaps between districts were pronounced.
The southeastern zone, covering Gangnam, Seocho, Songpa and Gangdong districts, accounts for 8,046 units scheduled for occupancy, or 48.1% of the citywide total. Relocations there total 2,922 households, meaning move-in supply is about 2.8 times relocation demand. The southeast, dense with high-priced homes, has seen active housing supply through rebuilding and other redevelopment projects and is expected to face relatively less strain than other zones.
The mismatch was clearest in mid- and low-priced areas where redevelopment had been less active. In the southwestern zone, which includes Yeongdeungpo, Gangseo, Yangcheon, Guro, Geumcheon, Dongjak and Gwanak districts, only 1,651 units are ready for occupancy next year, against 5,604 relocating households. That is 3.4 times the new supply.
The northeastern zone, covering Gangbuk, Gwangjin, Nowon, Dobong, Dongdaemun, Seongdong, Seongbuk and Jungnang districts, also has more relocations than move-ins, with 3,922 units scheduled for occupancy against 4,604 relocating households. Relocation demand exceeds move-in supply by about 17.4%. Analysts say concentrating redevelopment relocation demand in areas with relatively scarce new housing supply could focus the strain on the lease market.
On the ground, households are struggling to find alternative housing. An official at the redevelopment association for the Yeongdeungpo 1-11 district in Yeongdeungpo, which faces relocation next year, said: "Prices in Seoul are such a burden that most people move to Gyeonggi Province and live on a jeonse lease — a rental arrangement based on a large lump-sum deposit instead of monthly rent — before coming back to Seoul. Only about 30% to 40% stay in Seoul." An official at the association for the Wolgye Dongshin apartment complex in Nowon, where relocation is already under way, said: "The biggest problem is that there are no listings at all while jeonse and monthly rents are rising fast. The range of choices is simply narrow."
Rising jeonse prices also reflect the district-level mismatch. Cumulative jeonse price growth this year was highest in the northeastern zone at 11.44%, followed by the southwest at 7.50% and the southeast at 6.14%, according to the Korea Real Estate Board. Once relocation demand picks up in earnest, instability in the lease market could grow further, centered on areas with limited capacity to supply new homes.
Experts say rental measures and rental housing supply must advance together to meet relocation demand from redevelopment projects. Shin Bo-yeon, a professor of real estate and AI convergence at Sejong University, said: "Relocation demand from redevelopment projects will continue, so rental measures to meet it must be prepared alongside. Redevelopment projects can proceed without disruption only when rental housing supply backs them up."