Jeonse shortages are spreading not only in the Seoul metropolitan area, including Seoul, but also across the provinces. The sharp drop in new move-in supply, dwellings policy focused on owner-occupation, and the shift from jeonse to monthly rent have combined to cause a steep decline in jeonse listings. As jeonse supply fails to keep up with demand, the Jeonse Supply-Demand Index, which indicates the degree of instability in the jeonse market, has surged to the level seen during the 2021 jeonse crisis.
According to the recently released KB Real Estate report, KB dwellings market review May 2026 — jeonse market, Seoul's Jeonse Supply-Demand Index in May was 182.67. That is the highest since 188.63 in Dec. 2020. The index for the five major metropolitan cities and other provinces also rose to 166.33 and 167.49, respectively. For the five major metropolitan cities, this is the highest since 172.54 in Sept. 2021, and for other provinces, the highest since 169.91 in Oct. 2021.
The Jeonse Supply-Demand Index is an indicator that shows the balance between jeonse demand and supply. A reading above 100 means demand exceeds supply, and the higher the number, the more severe the shortage of jeonse listings. Generally, above 150 indicates a severe jeonse crunch, and above 180 is interpreted as close to a jeonse crisis. If this trend continues, the shortage of jeonse will worsen and upward pressure on jeonse prices will increase.
KB Real Estate said in the report, "As the supply shortage deepens, the Jeonse Supply-Demand Index hit a record high since 2021 not only in the Seoul metropolitan area but also in non-capital regions," adding, "With absolute supply volumes lacking, concerns are growing over jeonse shortages due to fewer new move-ins and an increase in conversions to monthly rent."
Public statistics also confirm instability in the jeonse market. According to the 5th week of May weekly apartment price trend survey released by the Korea Real Estate Board (REB) on the 28th of last month, Seoul's Jeonse Supply-Demand Index was 116.1. That is the highest in about 5 years and 2 months since the second week of March 2021, when it was 116.8. The nationwide Jeonse Supply-Demand Index was also 103.7, the highest since 104.9 in the second week of Sept. 2021.
The biggest cause of the jeonse crunch is cited as the decrease in dwellings supply. According to Real Estate R114, the number of nationwide move-ins for multifamily dwellings this year is 183,124 units, down 22.5% from last year. It is the smallest scale in 13 years since 169,000 units in 2013. The decline in move-ins is larger in Seoul. Seoul's move-ins, which were 49,973 units last year, have effectively been cut in half to 27,127 units this year.
In the Seoul metropolitan area, policy factors are also said to be worsening the jeonse crunch. With gap investing (buying dwellings with jeonse tenants in place) becoming difficult and regulations on multi-homeowners and rental business operators tightening, jeonse supply has decreased.
An employee at a licensed real estate agency in Songpa District, Seoul, said, "Gap investing has been blocked by the two-year owner-occupancy requirement in land transaction permit zones, and more multi-homeowners are selling homes or converting jeonse to monthly rent due to concerns about heavier capital gains taxes," adding, "As jeonse prices rise, tenants are also exercising their contract renewal rights, so new jeonse listings are shrinking further."
In fact, jeonse listings are decreasing rapidly. According to the real estate platform A Sil, jeonse apartment listings in Seoul and Gyeonggi totaled 29,543. Compared with 45,205 on Oct. 15 last year, that is a decrease of about 35%.
The problem is that the jeonse crunch is likely to worsen going forward. It is difficult to resolve the decline in supply volumes in the short term, and landlords' preference for monthly rent continues.
Kim In-man, head of the Kim In-man Real Estate Research Institute, said, "The 2021 jeonse crisis was largely due to landlords trying to reflect four years of jeonse price increases at once right after the implementation of the two key lease laws (contract renewal right and cap on rent and jeonse increases)," adding, "This time, it is a structural problem of jeonse listings themselves decreasing, so it needs to be viewed more seriously."
Seo Jin-hyung, a professor in the Department of Real Estate Legal Affairs at Kwangwoon University, said, "If the current government's policy direction continues, a jeonse supply cliff, a sharp surge in jeonse prices, and the shift from jeonse to monthly rent could accelerate," adding, "It is also hard to rule out the possibility of a jeonse crunch more severe than in 2021."