Seocho Lease Listings Jump 30% as Multi-Homeowners Return to Renting Out Properties

Seoul Apartment Lease Listings Increase by 2,847 in Ten Days
"Still Scarce Compared to Previous Years...Room for Jeonse Price Growth"
Jeonse Price Growth Rate Highest Since November 2015

After nearly half a year of decline, the supply of apartment lease (jeonse and wolse) listings in Seoul appears to have bottomed out and is now showing signs of increasing as of this month. This is interpreted as a result of owners, particularly those with multiple properties, offering their apartments for lease instead of selling them after the heavier capital gains tax on multi-homeowners took effect.

The surge in lease listings has been particularly pronounced in Seocho-gu. However, the overall supply still falls short of easing the chronic shortage compared to previous years, which is expected to continue putting upward pressure on prices for the time being. As of this week, the jeonse prices for Seoul apartments rose 0.28% from the previous week, marking the largest weekly increase in ten and a half years.

According to data compiled by real estate information provider Asil on May 15, the number of Seoul apartment lease listings stood at 32,733 as of the previous day, up by 2,847 (9.5%) from ten days earlier. The number of lease listings had dropped to a low of 29,726 on April 13, the lowest figure this year, but has been on a clear upward trend since then. During this period, more than 6,000 apartment sale listings in Seoul disappeared from the market, indicating that a significant number of properties initially put up for sale were switched to lease offerings.

Property listing notice posted at a real estate agency in Seoul. Yonhap News Agency

Seocho Apartment Lease Listings Exceed 10,000

By district, Seocho-gu reported 10,105 lease listings, representing an increase of about 30% over the same period. In Banpo-dong, a newly built apartment complex with more than 2,000 units is set to begin move-ins this August, and landlords have rushed to find tenants ahead of this, leading to a spike in available listings. Under Seoul's price cap policy, recipients of new apartment allocations in Seocho-gu are required to live in the property for three years, but this requirement only needs to begin within three years from the move-in date.

Other districts such as Mapo-gu, Seodaemun-gu, Gwanak-gu, Eunpyeong-gu, and Guro-gu also saw double-digit percentage increases in lease listings. Except for Gangbuk-gu, Songpa-gu, Jongno-gu, and Dobong-gu, 21 out of 25 districts in Seoul reported an increase in available lease properties.

Park Wongap, Senior Real Estate Expert at KB Kookmin Bank, commented, "It appears that properties owned by multi-homeowners are being switched from sale to lease, increasing the supply of lease listings. However, compared to the same period last year, the supply remains low, making it unlikely that jeonse prices will turn downward any time soon."

At Raemian Prestige in Seocho-gu, a renewal contract for an 84-square-meter unit was signed for 1.73 billion won at the beginning of this month. In late April, a new lease contract for the same unit type was signed for 1.8 billion won. Currently, jeonse listings for similar units in neighboring real estate agencies are priced between 1.7 billion and 1.9 billion won. At Banpo Xi, an 84-square-meter unit was leased on May 12 for a deposit of 1.3 billion won and monthly rent of 1.6 million won, which equates to around 1.717 billion won on a jeonse basis, with the average jeonse price being approximately 1.73 billion won (based on KB’s average).

At Raemian One Bailey, an 84-square-meter unit was reported to have been leased for 1.75 billion won at the start of this month, while current listings are priced between 2 billion and 2.2 billion won. Industry watchers expect this trend to persist for the time being, as the supply of properties for sale is unlikely to increase, compelling owners to opt for lease arrangements instead.

Apartment viewed from Lotte World Tower in Songpa-gu, Seoul. Photo by Yonhap News Agency

Lease Listings Still 10,000 Fewer Than a Year Ago
Seoul Jeonse Prices Up 0.28%... Highest Since 2015

Despite the increase in available properties, jeonse prices for Seoul apartments have climbed sharply in recent weeks. According to weekly apartment price trends released by Korea Real Estate Board on May 14, the average jeonse price in Seoul rose by 0.28% in the second week of May (as of May 11) compared to the previous week. This is the highest rate of increase since the first week of November 2015 (0.30%). Although more properties are on the market, supply remains significantly below demand. Additionally, ongoing redevelopment projects in various city centers are leading to more apartment demolitions, and a persistent aversion to non-apartment dwellings has not subsided.

The sharp rise in apartment prices last year is another factor fueling the increase in jeonse prices. According to the Korea Real Estate Board, the jeonse-to-sale price ratio for Seoul apartments over the past three months averaged 54.7%. Around 2022, this ratio exceeded 60%. Unless apartment prices fall, there is a high likelihood that jeonse prices will continue to rise.

Ham Youngjin, Head of Real Estate Research Lab at Woori Bank, stated, "While monthly fluctuations in lease supply can occur due to factors such as new apartment move-ins, the current level is about 10,000 fewer than a year ago. With lease supply below average, an increase in rental conversions to monthly rent, and fewer renewal contracts being released to the market, jeonse prices are rising more sharply compared to last year."

Not only lease prices, but also sales prices for Seoul apartments are showing notable increases. Previously, price declines were observed in Gangnam while outer regions saw rises, but this week, even Gangnam-gu has shifted to an upward trend, further amplifying the overall increase. According to the Korea Real Estate Board, Seoul apartment prices rose 0.28% from the previous week, marking the sharpest increase in 15 weeks. Every district in Seoul saw a higher rate of increase compared to the previous week.

Kim Hyosun, Senior Real Estate Expert at KB Kookmin Bank, explained, "The Seoul apartment market is not simply in a rising phase, but experiencing an ultra-polarized and highly localized surge. The momentum is not driven solely by investment expectations but also by concentrated demand for real estate assets desirable for actual living, such as redevelopment sites, properties near subway stations, or those in top school districts, making asset selection much more selective."

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