Sharp Decline in Rental Listings Heightens Tenant Anxiety

Impact of Multiple Homeowners Holding Out
Listings Down 29.9% So Far This Year

The government has decided to allow not only multiple homeowners but also non-resident single-homeowners to sell "sublet" properties, which is expected to further intensify the shortage of properties available for jeonse and monthly rent contracts. In particular, after the re-implementation of the capital gains tax penalty, multiple homeowners who have chosen to hold onto their properties are likely to increase jeonse and monthly rent prices, thereby threatening tenants' housing conditions.

According to Asil, a real estate big data firm, as of May 12, the total number of Seoul apartment listings available for jeonse and monthly rent stood at 31,448. The number of jeonse listings was 16,348, and monthly rent listings totaled 15,100. Compared to January 1 this year, when the figure was 44,424, this represents a decrease of 29.2%.

The decrease in jeonse and monthly rent listings is largely due to multiple homeowners, who had played a key role as suppliers, withdrawing their properties from the market in response to regulations such as the capital gains tax penalty. On January 23, when President Lee Jaemyung announced that the grace period for the capital gains tax penalty on multiple homeowners would not be extended, the number of Seoul jeonse and monthly rent listings was recorded at 42,784. Of the 29.2% decrease so far this year, 26.5% occurred after the President's announcement. If non-resident single-homeowners also begin to offload their properties, it will become even more difficult to find rental properties. An agent at A Realty in Gongdeok-dong, Mapo-gu commented, "The number of properties coming on the market is lower than before."

As listings decline, prices are rising even more steeply. According to data from the Korea Real Estate Board, as of May 4, the accumulated year-to-date change in Seoul apartment jeonse prices was 2.61%. Compared to the same period last year, which was 0.45%, this is 2.16 percentage points higher. Demand for monthly rentals is also rising, leading to a vicious cycle of increasing monthly rent prices. As of March, the average monthly rent for Seoul apartments stood at 1,528,000 won, maintaining an upward trend after surpassing the 1.5 million won mark in January, when it was 1,504,000 won.

Kwon Youngsun, team leader at Shinhan Bank's Real Estate Investment Advisory Center, said, "If real estate taxes are strengthened, homeowners returning to meet residency requirements become a destabilizing factor in the rental market. As the role of private multiple homeowners in supplying jeonse and monthly rent properties diminishes, public rental housing or corporate leasing businesses will have to fill the gap, but it is difficult to expect such a rapid transition."