Seoul's apartment rental market is facing its most severe supply-demand gap in five and a half years [1].
This shortage puts significant pressure on tenants as the imbalance between available properties and seekers drives rental prices higher. The trend affects both the traditional Jeonse system, a lump-sum deposit lease, and standard monthly rentals.
During the second week of June 2024, the Jeonse supply-demand index for Seoul reached 122.5 [1]. This figure is the highest recorded since the third week of February 2021, when the index hit 122.8 [1]. The index operates on a scale where 100 is the baseline; a move toward 200 indicates that there are significantly more people seeking rentals than there are landlords offering them [1].
Monthly rental markets are experiencing similar strain. In May 2024, the monthly-rent supply-demand index for Seoul stood at 114.8 [1]. This represents a month-over-month increase of 5.1 points [1].
Experts attribute the current crisis to a lack of new rental supply and a rise in the number of tenants opting for contract renewals. These factors have created a bottleneck in the market, leaving few options for new renters or those looking to move.
The financial impact on residents is accelerating. The cumulative Jeonse price increase rate is now approximately six times higher than it was during the previous year [1].
Reporter Hwang Bo-yeon of YTN said that the supply-demand index indicates a market where those seeking homes far outnumber those listing them [1].
“Seoul's apartment rental market is facing its most severe supply-demand gap in five and a half years.”
The convergence of a supply shortage and high renewal rates suggests that Seoul's housing market is entering a period of sustained price inflation. Because the Jeonse index is nearing its 2021 peak, tenants may face a choice between significantly higher deposits or a forced shift toward monthly rentals, which are also seeing increased competition.
