Monthly Rent Listings Accumulate... But Tenants Have Nowhere to Go

The view of Seoul apartments from 63 Square in Yeouido, Seoul, on the 8th.

"The jeonse prices have risen so much that even if I want to move, I can't." (Mr. A, a worker in his 30s)

It has been revealed that the volume of jeonse and monthly rental apartments in Seoul has nearly doubled in the past year. Despite the surge in listings, prices remain unchanged, making it difficult to find new contracts even during the winter moving season. Experts point out that this abnormal phenomenon is caused by a combination of various government measures, including the Lease Protection Act (right to request contract renewal and rent ceiling), loan regulations, and increased tax burdens on landlords.

According to Asil, a real estate big data company, as of the day before, the number of jeonse listings for apartments in Seoul was 31,502. This is the highest since last August when the number of jeonse listings dropped below 10,000 due to monitoring measures against false and exaggerated real estate advertisements. Compared to December 12 last year (15,421 listings), the number has more than doubled. The situation with monthly rental listings is not much different. Monthly rental listings increased by about 57%, from 12,761 a year ago to 20,064. During the same period, apartment sale listings increased by only 4.6%.

Although jeonse listings have surged sharply in the past year, prices remain unchanged, leaving those wanting to move frustrated. Mr. B, living in Deungchon-dong, Gangseo-gu, Seoul, said, "Due to personal circumstances, I suddenly have to move to Gangdong-gu, but I can't find a tenant, so I don't know when the landlord will return my deposit." This is due to the rapid rise in jeonse prices in a short period. Mr. B added, "Jeonse prices around here have risen by more than 100 million won compared to a year and a half ago," and "Since the landlord wants to accept new tenants at market prices, it seems difficult to make a deal."

The reason landlords are reluctant to lower their asking prices is attributed to the Lease Protection Act. While tenants can extend their lease once through the right to request contract renewal, the deposit increase is limited to within 5%. The head of C Real Estate Agency in Deungchon-dong explained, "Since jeonse prices are effectively frozen for four years, landlords want to raise the deposit in advance."

However, the dominant analysis is that the increase in jeonse listings is a temporary phenomenon. This is because it is caused by a combination of a temporary increase in move-in supply and demand contraction due to various regulations. According to Zigbang, a real estate information company, the number of apartment move-ins in the metropolitan area last month was 15,935 units, the second highest this year after January (19,593 units). The contraction of demand for switching homes due to loan regulations is also cited as a reason why jeonse listings are not being depleted. Moreover, jeonse listings are increasingly being converted to monthly rentals. The burden of comprehensive real estate tax and other holding taxes is accelerating the shift from jeonse to monthly rent. From January to November this year, the proportion of monthly rental transactions among apartment lease transactions in Seoul was about 36.5%, an increase of about 8% compared to the six months before the Lease Protection Act.

Seojinhyung, president of the Korea Real Estate Society (professor at Gyeongin Women's University), said, "The market is moving away from a long-term landlord-favored market, and a power struggle between landlords and tenants is now fully underway," adding, "Without new supply and easing of transaction taxes, fundamental market stabilization is difficult to expect."

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