Seoul's Jeonse Prices Hit Record High Amidst Severe Rental Shortage

The rental market in Seoul is experiencing an unprecedented surge, pushing jeonse prices to historic highs and creating significant financial strain for residents. A stark example is an 84㎡ apartment in Gangbuk-gu, whose jeonse jumped from 400 million KRW to 550 million KRW in just three months, forcing a young family to opt for a banjeonse contract. This dramatic increase is attributed to a severe shortage of rental listings, which have plummeted by over 33% this year. The situation is particularly acute in areas with good school districts, where demand from families with young children remains high. The ripple effect of these soaring rental costs is a growing concern, with experts predicting it could ignite the sluggish housing sales market. As rental prices become increasingly unaffordable, more potential buyers may be compelled to enter the market, especially in Seoul's outer districts, where property prices are relatively lower. This trend is exacerbated by a persistent lack of new housing supply, which shows no signs of abating in the near future. The Korean real estate market, already complex, faces further challenges as the jeonse system, a unique feature of the housing market, continues to evolve under these extreme pressures. The current situation underscores the urgent need for policies that address both rental affordability and housing supply to ensure market stability.

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There are almost no rentals available nearby, and the prices have risen too much, so many people are signing banjeonse contracts.