Last Month's Jeonse and Monthly Rent Price Increase in Seoul Hits Record High Since Data Compilation

Korea Real Estate Board's April Housing Price Trend Survey
Largest Increase in Integrated Jeonse and Monthly Rent Index Since 2015

According to a recent survey, the increase in jeonse (lump-sum deposit lease) and monthly rent prices in Seoul over the past month has reached the highest level since 2015. This trend is attributed to persistent anxiety caused by a shortage of supply, as well as a lack of properties for sale ahead of the upcoming increase in capital gains tax on property transfers.

On May 15, Korea Real Estate Board announced the results of its April housing price trend survey, showing that the integrated jeonse and monthly rent index for all housing types in Seoul rose by 0.65% compared to the previous month. This increase is the largest on a monthly basis since the related statistics began to be compiled in June 2015. The previous record was set in December of last year, when the monthly increase was 0.53%.

There were also significant rises by individual housing type. Last month, the integrated jeonse and monthly rent index for apartments in Seoul increased by 0.79% over the same period, while row houses rose by 0.48%, and detached houses by 0.37%. For each housing type, these figures represent the largest monthly increases since the index began. This indicates that instability has become widespread throughout the entire residential lease market, not only for apartments—where transaction volume tends to be higher and price hikes more pronounced—but also for row and detached houses.

Apartment and villa complexes in downtown Seoul. Photo by Yonhap News

The integrated jeonse and monthly rent index comprehensively covers the monthly rent index, which includes jeonse (where only a lump-sum deposit is paid), as well as monthly rent, quasi-monthly rent, and quasi-jeonse (which involve a certain deposit and monthly payments). While indicators for jeonse have been in place since 2003, a separate integrated index has been published since 2015 to account for the shift in the rental market toward monthly rent. The housing lease market features a wide range of individual cases, such as switching between jeonse and monthly rent, and this index is designed to reflect such diversity.

Last month, the overall housing sales price index in Seoul rose by 0.55% from the previous month. While the rate of increase appeared to ease somewhat in March, the pace picked up again. The jeonse price index rose by 0.66%, and the integrated monthly rent index increased by 0.63%. The rate of increase in rental transactions is steeper than that of sales transactions.

The Korea Real Estate Board explained, "In Seoul and the greater metropolitan area, price increases have been recorded in preferred complexes such as those undergoing reconstruction or large-scale developments, while in some areas, buyers are holding off or watching the market, resulting in a mixed market situation. However, the overall trend remains upward. In terms of rentals, demand continues across the board, with more inquiries and rising transactions being observed in complexes with favorable residential environments, particularly those near subway stations, leading to higher prices compared to the previous month."

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