"Won't leave without moving fees"... The escalating conflict in the jeonse market

The South Korean real estate market is currently grappling with a complex web of issues, primarily centered around the escalating conflicts between landlords and tenants concerning property vacations. As the deadline for the abolition of the capital gains tax increase for multi-homeowners approaches, landlords in prime Seoul areas like Gangnam and Songpa are resorting to offering substantial 'moving fees' to tenants to expedite their departure. This practice, while seemingly a pragmatic solution, is creating significant friction and highlighting the precariousness of the rental market.

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Tenants have nowhere to go, but landlords need to sell their houses, so they end up paying tens of millions of won as moving expenses. If the amount is right, they leave, and if not, it leads to a lawsuit.

Reports indicate a sharp increase in rental disputes, with the Seoul Rental Dispute Mediation Committee seeing a 63% rise in cases compared to the previous year. A significant portion of these disputes revolve around the return of properties and lease terms. The phenomenon of landlords offering tens of millions of won as "moving bonuses" has become so prevalent that a de facto "moving fee market" has emerged. This is particularly acute in areas requiring tenant vacating certificates for development permits, where landlord's ability to sell is directly contingent on tenant cooperation.

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For areas requiring a district office permit, a tenant's vacating certificate must be submitted, making the sale difficult without the tenant's cooperation. When landlords want to make them leave, they sometimes pay 10 to 15 million won for a 12-pyeong unit, or 20 to 30 million won for a 20-pyeong unit.

The underlying tension is further amplified by the impending end of the owner-occupancy grace period in February 2028. This policy allows homeowners to delay moving into their properties, but its expiration is fueling anxieties about a potential surge in jeonse (lump-sum deposit) prices and a widespread eviction crisis. Many tenants, especially those with children, find themselves in a difficult position, unable to secure alternative housing within their budget, leading them to resist vacating their current homes.

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Even if the tenant initially agrees to leave, if they cannot find a place to go within the deadline, they might change their mind, leading to a lawsuit.

From a local perspective in Seoul, this situation is more than just a real estate transaction; it's a social issue impacting the stability of households. The article from Dong-A Ilbo captures the on-the-ground sentiment, where the practicalities of securing new housing, the rising costs of jeonse, and the emotional toll of potential displacement are paramount. While international coverage might focus on market dynamics, the Korean perspective emphasizes the human element – the struggle of tenants caught between rising costs and landlord demands, and the potential for a broader societal impact as the 2028 deadline looms.

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As the grace period approaches, tenants will face increasing pressure to move out. They all have to leave by February 2028, and if tenants cannot find housing then, rents could skyrocket, leading to a crisis. We are taking this very seriously on the ground.