Seoul apartment jeonse transactions have plunged this year. In 18 of the city's 25 districts, jeonse contracts fell by more than 30%, and in some areas, the transaction volume shrank to about half in just three months.
Experts said various regulations, including the government's expansion of the land transaction permit system (Toheoje), are spurring a decline in jeonse supply. As jeonse listings dwindle, monthly rent burdens are growing, and there are rising concerns that working-class residents will ultimately be pushed to the outskirts of Seoul or the outer areas of the greater capital region.
According to ZIGBANG CO. on May 18, jeonse contracts concluded across Seoul's 25 districts in April totaled 7,908. That was down 35.7% (4,407) from 12,315 in January.
By district, 18 of Seoul's 25 districts saw jeonse contracts fall by more than 30%, except for seven including Gangbuk and Gangseo. The decline was particularly steep in Gangnam and other highly favored residential areas.
In Gangnam District, jeonse contracts dropped from 1,100 in January to 562 in April, a 49% decline. Jungnang (-45%), Yeongdeungpo (-44%), Seongdong (-43%), Dongjak (-42%), Mapo (-41%), Seodaemun (-41%), Geumcheon (-41%), and Songpa (-40%) also recorded a sharp drop of 40% or more in jeonse transactions.
Nowon (1,053→640, -39%) and Gangdong (787→499, -37%), home to large apartment complexes, are also seeing a clear shortage of jeonse listings.
The market expects the decline in jeonse to likely continue for the time being. In land transaction permit zones, so-called "gap investment," where buyers purchase homes with existing jeonse tenants, is effectively blocked, and new move-in supply is also decreasing. The contraction in jeonse supply is likely to lead to higher jeonse prices and monthly rents. There are projections that working-class households without homes, who struggle to buy, will increasingly leave Seoul for the outskirts of Gyeonggi Province.
Shin Bo-yeon, a professor in the Department of Real Estate AI Convergence at Sejong University, said, "The government is trying to reshape the housing market around end users by expanding designations under the land transaction permit system and signaling regulations on non-resident single-homeowners," and added, "Even among end users, more are opting to buy rather than live on jeonse or monthly rent, leading to a decline in jeonse demand itself."
Nam Hyeok-woo, a real estate researcher at Woori Bank, said, "Under the land transaction permit system, multi-homeowners are disposing of dwellings due to concerns over capital gains tax burdens, reducing the jeonse supply itself," and added, "On top of that, with a shortage of new apartment supply, the decline in Seoul's jeonse is likely to continue for the time being."