As the shift from jeonse to monthly rent accelerates, global investors are showing growing interest in new rental housing models such as co-living.
On the 24th, JLL Korea said this in its 2026 Seoul rental housing market report.
According to the report, changes in the population structure and household composition are cited as the key factors driving this shift. As of May, about half of Korea's total population of about 51.1 million is concentrated in the greater Seoul area, including Seoul. In particular, about 18% of the total population lives in Seoul, and the share of single-person households living alone reached about 41%.
Meanwhile, the existing rental system is facing a crisis. Anxiety among tenants has grown amid a confluence of tens of thousands of cases of unreturned deposits, a high interest rate environment, and cases where jeonse prices exceed sale prices. As a result, the share of jeonse transactions in the greater Seoul area has fallen from above 70% about a decade ago to around 38% last year.
On top of that, in recent years, the number of new housing building permits in Seoul has fallen well below the long-term average, prolonging a supply shortage. Seoul's price-to-income ratio (PIR) is 13.9 times, and the rent-to-income ratio (RIR) is 18.4%, indicating a continued heavy housing cost burden.
Given this situation, the government introduced the "new-type long-term private rental housing" system to increase housing supply in the private sector, under which corporations purchase 100 or more dwellings and lease them stably for more than 20 years. This business model is categorized into autonomous, semi-autonomous, and supported types, and if the mandatory lease period (20 years) and rent increase limits are observed, the punitive acquisition tax on corporations (12%) and the inclusion in the comprehensive real estate tax base and the additional corporate income tax (20%) are excluded. The semi-autonomous and supported types also receive local government tax reductions, and in the case of multifamily housing, officetels, and rental dormitories, the acquisition and property taxes are further reduced depending on exclusive floor area.
The report stressed that, in this environment, co-living is drawing attention as an attractive alternative. Since 2024, global institutional investors have been accelerating their investments in domestic rental housing and co-living. In fact, from 2024 to 2026 alone, more than 17 major transactions have been closed, mostly by acquiring officetels in city centers or tourist hotels struggling with operations and remodeling them into co-living facilities tailored to the tastes of younger people. As of May, the median monthly rent for co-living units of 40 square meters or less of exclusive area in Seoul was about 1.13 million won, about 1.4 times higher than typical officetels (790,000 won). However, by offering added value such as shared spaces, facilities, and community services, they are gaining popularity among young people and foreign residents.
Lee Tae-ho, head of JLL Korea, said, "Korea's housing market is rapidly shifting from jeonse to monthly rent and from family households to single-person households, which provides an attractive investment environment for institutional investors seeking stable rental income," adding, "In particular, co-living offers high operational efficiency and a differentiated living experience, and continued inflows of global capital are expected."