South Korea's March rental market sees 11% drop in jeonse, 36% rise in monthly rent

The spring moving season in March brought a noticeable shift in South Korea's rental market, with a significant 11% drop in jeonse transactions compared to the previous year. This decline, however, was counterbalanced by a substantial 36% surge in monthly rent deals, pushing the proportion of monthly rent in the overall rental market to a striking 68.6%. This trend, detailed in the Ministry of Land, Infrastructure and Transport's housing statistics, reflects a growing preference or necessity for monthly rent arrangements across the nation.

While the overall housing sales market saw a modest 7% increase, this growth was primarily fueled by non-metropolitan areas, as Seoul experienced a considerable 14.3% decrease in sales transactions. The capital city's housing market, particularly its apartment sector, saw a sharp 31.2% decline in sales. This divergence highlights a potential cooling in the Seoul market compared to the rest of the country.

Construction data also paints a mixed picture. Housing permits and new constructions saw a decrease, with permits falling by 37.7% year-on-year. However, construction starts surged by 37.9%, and new housing sales approvals more than doubled, increasing by 112.8%. Conversely, completions and move-ins dropped by 24.3%, particularly in the Seoul metropolitan area. This suggests a potential future supply-demand imbalance, with more new units being approved and started than completed, especially in key urban centers.