Jeonse shortages are spreading not only in the Seoul metropolitan area, including Seoul, but also to the provinces. The sharp drop in new move-in supply, dwellings policy centered on owner-occupancy, and the conversion of 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 reflects the level of strain in the jeonse market, has surged to levels seen during the 2021 jeonse turmoil.
According to "KB Dwellings Market Review May 2026—Jeonse Market," recently released by KB Real Estate on the 1st, Seoul's Jeonse Supply-Demand Index in May was 182.67. That is the highest reading 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. The five major metros are at the highest level since 172.54 in Sept. 2021, and other provinces since 169.91 in Oct. 2021.
The Jeonse Supply-Demand Index indicates the balance between jeonse demand and supply. A reading above 100 means demand exceeds supply, and the higher the figure, the more severe the shortage of jeonse listings. Generally, above 150 indicates a serious jeonse crunch, and above 180 is interpreted as close to a jeonse crisis. If this trend continues, the scarcity of jeonse will intensify and the upward pressure on jeonse prices will grow.
KB Real Estate said in the report, "As supply shortages deepen, the Jeonse Supply-Demand Index hit a record high since 2021 not only in the Seoul metropolitan area but also outside the metro area," adding, "With absolute supply volumes lacking, concerns are mounting over jeonse shortages due to a decrease in new move-in supply and more conversions to monthly rent."
Public statistics also confirm instability in the jeonse market. According to the "Fourth 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 level in about five years and two months since 116.8 in the second week of Mar. 2021. The national 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 a decline in dwellings supply. According to Real Estate R114, the nationwide move-in supply of multifamily dwellings this year is 183,124 units, down 22.5% from last year. It is the lowest in 13 years since 169,000 units in 2013. The drop in move-in supply is steeper in Seoul. Seoul's move-in supply, which was 49,973 units last year, has effectively halved to 27,127 units this year.
In the Seoul metropolitan area, policy factors are also seen as exacerbating the jeonse crunch. With gap investing (purchasing dwellings with jeonse tenants in place) becoming more difficult and tighter regulations on multiple-home owners and registered landlords, jeonse supply has fallen.
An employee at a certified 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 multiple-home owners, mindful of heavier capital gains tax, are selling homes or switching jeonse to monthly rent," adding, "As jeonse prices rise, tenants are exercising their contract renewal rights, so new jeonse listings are decreasing even further."
In fact, jeonse listings are declining rapidly. According to the real estate platform Asil, the total number of apartment jeonse listings in Seoul and Gyeonggi stood at 29,543. Compared with 45,205 on Oct. 15 last year, that is a drop of about 35%.
The problem is that the jeonse crunch is likely to worsen. The decrease in supply is hard to resolve in the short term, and homeowners' preference for monthly rent continues.
Kim In-man, head of the Kim In-man Real Estate Research Institute, said, "The 2021 jeonse turmoil was largely driven by homeowners trying to reflect four years' worth of jeonse increases at once right after the enforcement of the two lease laws (contract renewal right and caps on rent and jeonse hikes)," adding, "This time, it is a structural problem of jeonse listings themselves shrinking, so it needs to be viewed as more serious."
Seo Jin-hyeong, a professor in the Department of Real Estate Law and Administration at Kwangwoon University, said, "If the current administration's policy stance continues, a jeonse supply cliff, a surge in jeonse prices, and the conversion of jeonse to monthly rent could accelerate," adding, "It is hard to rule out the possibility of a jeonse crunch more severe than in 2021."