The apartment rental market in Seoul is seeing rising prices and a decline in available listings. Forecasts suggest a continued rental shortage in the second half of this year as the volume of new move-ins decreases, alongside expectations that enhanced rental loan regulations will stabilize rental prices.
According to the Korea Real Estate Board (REB) on the 28th, apartment rental prices in Seoul showed an upward trend for six consecutive months through the second week of this month, excluding Seocho.
Songpa and Gangdong increased by 0.27% and 0.22%, respectively, while Gangseo, Gwangjin, and Yongsan rose by 0.13% to 0.14%. In contrast, Seocho was the only district in Seoul to decline by 0.18% due to the move-ins of large complexes like Maple Jai.
The reason for the rising rental prices is that the volume of new apartment move-ins has significantly decreased starting this year. According to Real Estate R114, the move-in volume for apartments in Seoul in the third quarter is 5,680 units, a 53.5% decrease compared to the second quarter (12,224 units). The projected volume of new apartments scheduled to be moved into in Seoul next year is also set to drop to 24,462 units, half of this year's 46,710 units.
Rental listings are also being quickly depleted. According to real estate big data platform Asil, as of the 24th of this month, the number of apartment rental listings in Seoul was 24,177, about a 15% decrease compared to three months ago (27,745 listings).
With the high-intensity real estate loan regulations announced on June 27, forecasts suggest that the scarcity of rentals and the phenomenon of converting rentals to monthly leases in Seoul will intensify.
Kwon Dae-jung, a professor in the Department of Real Estate at Sogang University, noted, "Since the June 27 measures, real estate transaction volumes have decreased, causing rental listings to vanish quickly," and added, "This fall, rental prices for both apartments and monthly leases in Seoul will increase."
Ham Young-jin, head of the Real Estate Research Lab at Woori Bank, also analyzed, "As the apartment sales market in Seoul takes a breather, purchasers may remain in the rental market, and with fewer move-ins in the second half of this year, rental prices are likely to rise significantly."
On the other hand, there is also a perspective that the rental market in Seoul will stabilize as the government reduces the limits on rental loans. Chae Sang-wook, CEO of Connected Ground, stated, "Until now, rental prices have remained strong for about ten years because it was possible to obtain rental loans at low rates to secure rental deposits," and he forecasted, "If the limits on rental loans are reduced, rental prices will decrease."
Choi Sang-don, a specialist in the Real Estate Research Institute at KB Securities Tax Solutions, remarked, "Since June 19, the Housing and Urban Guarantee Corporation has reduced the guarantee ratio on rental loans, and from June 28 onward, rentals contingent on the transfer of ownership have been prohibited starting from contracts that were signed," and he added, "With rental return loans also limited to 100 million won, the rental prices are likely to show weakness in the second half of this year."