Soaring Jeonse Prices... Competition Rate for National Rental Housing Doubles

SH 2nd Phase National Rental Housing Records Competition Rate of 10.0 to 1

[Image source=Yonhap News]

[Asia Economy Reporter Moon Jiwon] Since the implementation of the new lease law, the shortage of jeonse (long-term lease) has spread, leading to increased competition rates for rental housing, especially in the metropolitan area.

According to Seoul Housing and Communities Corporation (SH Corporation) on the 18th, the 2nd round of public rental housing announced at the end of September attracted 9,800 applicants for 979 units, recording a competition rate of 10.0 to 1.

When SH Corporation announced the 1st round of public rental housing recruitment at the end of May, 11,192 people applied for 2,405 units, resulting in a competition rate of 4.7 to 1. The competition rate has more than doubled compared to that time.

Public rental housing is provided for more than 30 years to non-homeowners with an average monthly household income of 70% or less. The 2nd round of public rental recruitment included popular areas such as Magok District 9 Complex, Godeok Gangil Public Housing District 8 Complex, and Gangdong Lien Park 14 Complex, while the 1st round also included popular areas such as Godeok Gangil Public Housing District 4, 6, 7, 9 Complexes and Wirye District Block 3.

Despite similar locations, the competition rate increased because the shortage of jeonse worsened after the implementation of the new lease law, including the rent ceiling system and the right to request contract renewal, at the end of July.

Public rental housing supplied by Korea Land and Housing Corporation (LH) in the metropolitan area has also seen a continuous rise in competition rates since the new lease law was enacted. The Hwaseong Dongtan 2 public rental housing supplied on August 7, right after the law's implementation, recorded an average competition rate of 1.3 to 1, but the Goyang Samsong A24 Happy Housing on September 24 recorded 1.8 to 1, and Siheung Janghyeon Happy Housing recorded 5.2 to 1, showing increased competition rates.

The Godeok Eoullim Square public-supported private rental apartment, introduced in August in Pyeongtaek Godeok New Town, also showed a competition rate as high as 5.7 to 1. Since residents can live there for up to 8 years at affordable rent, competition for moving in is becoming fierce.

According to the real estate big data company 'Asil' (Apartment Real Transaction Price), as of this day, the number of jeonse listings in Seoul has decreased by 52.3% compared to three months ago. Incheon (40.0%) and Gyeonggi (32.4%) also saw significant decreases. As the supply decreases, jeonse prices are naturally rising sharply.

As the government observed that the sales prices, which had been stabilizing amid the jeonse shortage, have started to rise, it plans to announce jeonse measures on the 19th that include increasing the supply of rental housing.

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