As Seoul grapples with a jeonse and monthly rent crunch, apartment lease listings in Guro, Nowon, Dobong and Gangbuk districts—areas classified as working-class residential zones—have fallen by more than 50%. With fewer jeonse and monthly rent options available for moves, existing tenants are increasingly renewing their contracts.
According to real estate big data firm A-SIL on the 1st, four of Seoul's autonomous districts have seen lease listings drop by at least 50% so far this year. Guro District recorded the steepest decline. Guro's jeonse and monthly rent listings fell 58.0%, from 687 on Jan. 1 this year to 289 as of the previous day. Over the same period, Nowon's lease listings fell 55.7%, from 1,198 to 531, while Dobong and Gangbuk each saw declines of 51.3% (541→264) and 50.5% (242→120), respectively.
Supply is also shrinking in the three Gangnam districts (Gangnam, Seocho and Songpa) and in districts along the Han River belt. With the end of the capital gains tax break for multi-homeowners looming and property tax expected to rise, demand is shifting from leasing to sales. Songpa's jeonse and monthly rent listings dropped 30.7%, from 6,922 on Jan. 1 this year to 4,803 on the day, while Gangnam fell 29.1%, from 12,259 to 8,700. Seocho declined 20.9%, from 7,535 to 5,967.
During this period, Yongsan's jeonse and monthly rent listings decreased 8.5%, from 1,047 to 959, marking a single-digit drop among Seoul districts in apartment lease listings.
The rapid decline in jeonse and monthly rent listings this year appears to reflect the effect of the land transaction permit system imposing owner-occupancy requirements, along with tighter regulations on multi-homeowners and registered landlords, which have reduced the stock of leasable homes. Analysts also say that government limits on expanding private rentals—such as raising the bar for jeonse loans—have contributed to the contraction in available jeonse and monthly rent supply.
Ham Young-jin, head of Woori Bank Real Estate Research Lab, said, "With all of Seoul designated as a land transaction permit and regulated area, buyers must purchase dwellings on the premise of owner-occupation, and as regulations on multi-homeowners and private rental business operators tighten, the pool of homes that can come to market as jeonse or monthly rent is shrinking." Ham added, "Jeonse loan guarantees are declining while interest burdens are increasing, and various factors are jointly (reducing jeonse and monthly rent supply)." Ham said, "In the wake of the jeonse fraud crisis, the government is not structurally trying to maintain jeonse as in the past, so I think the jeonse and monthly rent crunch could persist in the long term."
As jeonse and monthly rent listings plunge, more tenants are renewing existing jeonse or monthly rent contracts instead of moving. According to the Ministry of Land, Infrastructure and Transport's actual transaction disclosure system, from Mar. 1 to 30, renewals accounted for 6,967 (50.1%) of 13,895 apartment jeonse and monthly rent transactions in Seoul. That is up 13.9 percentage points from the same period a year earlier (36.2%).
Kim Hyo-seon, senior real estate specialist at KB Kookmin Bank, said, "Currently, the expense of purchasing dwellings has risen, and with lending limits, it is difficult to secure a home," adding, "In particular, since jeonse and monthly rent listings are likely to continue decreasing, the share of renewals over new contracts is likely to rise."