Gangnam public rental apartments with billion-won deposits go begging while northern Seoul units draw hundreds of applicants

Public rental apartments offered at below-market rates for newlyweds in Seoul have drawn wildly divergent levels of interest depending on location, with units in Gangnam carrying deposits of more than 1.1 billion won ($809,000) failing to fill.

According to the Seoul Housing & Communities Corporation (SH), the eighth round of subscriptions for the city's Mirinaezip program — held this month — saw just two applicants for five units at Raemian Daechi Palace in the 59-square-meter category, a ratio of 0.4 to 1. At Raemian Firstage in Seocho-gu, nine households applied for eight units in the same size category, yielding a ratio of 1.1 to 1, while Maple Xi's 43-square-meter units drew a ratio of only 2.2 to 1.

The figures stand in sharp contrast to the overall round, in which 22,883 people applied for 496 units — an average competition ratio of 46.13 to 1. Industry observers say the disparity reflects both differing preferences among complexes and the steep deposits acting as a barrier to entry.

To apply for a Mirinaezip unit of 60 square meters or smaller, applicants must have a monthly income below 7.04 million won and total assets below 662 million won, based on a two-person household with no children earning 120 percent of the average monthly wage. The undersubscribed 59-square-meter units at Raemian Daechi Palace carry a jeonse deposit of 1.17 billion won. A newlywed couple with 600 million won in assets who wished to move in would need to secure the remaining 570 million won through loans or other outside financing.

Even using the installment deposit payment system the Seoul Metropolitan Government introduced in April this year, the burden remains heavy. Under the system, tenants pay 70 percent of the deposit upon move-in, with the remaining 30 percent deferred and subject to a low annual interest rate of 2.73 percent. Using the installment option, a household would still need to raise 819 million won upfront and cover roughly 800,000 won in monthly interest payments.

Not all Gangnam public rental units went unfilled, however. Cheongdam Le'El in Cheongdam-dong, Gangnam-gu — offered at the same deposit as Raemian Daechi Palace — drew 392 applicants for 57 units, a ratio of 7 to 1. DH Bangbae in Bangbae-dong, Seocho-gu, which began accepting move-ins this month with 133 units on offer at a deposit of 850.2 million won, attracted 3,329 applicants for a ratio of 25 to 1.

Still, those figures fall far short of the competition seen at transit-oriented complexes in northern Seoul, where ratios ran into the hundreds. Cheongkwang Plus One in Jungnang-gu, with a deposit of 373.62 million won, recorded a ratio of 478 to 1 for its 84-square-meter units. Other complexes posting high ratios included Hillstate Gangdong Riverview in Gangdong-gu at 430 to 1 for 84-square-meter units, Doosan We've The Prestige in Guro-gu at 408 to 1 for 59-square-meter units, Junggye Hanwha Kkume Geurin The First in Nowon-gu at 402 to 1 for 59-square-meter units, and Sangdo 2-cha Doosan We've Tresium in Dongjak-gu at 275 to 1 for 59-square-meter units.

The Seoul Metropolitan Government has acknowledged that the high deposits could lead to more cases of undersubscription going forward.

The city supplied 7,108 Mirinaezip units between July 2024 and August this year and plans to add 17,500 more by 2030. Given that the bulk of long-term jeonse housing supply is expected to come from Gangnam, where redevelopment activity is concentrated, it appears only a matter of time — at current property price levels — before the number of Mirinaezip units priced above 1 billion won grows further. Units at Banpo DH Classt, set to open for move-in next year, as well as those expected from the reconstruction of Apgujeong Hyundai, are widely expected to carry deposits above 1 billion won.

"The deposit is set at 80 percent of the surrounding market price, and the long-term benefits — including extended residency upon childbirth and priority purchase rights — need to be weighed alongside the upfront cost," a city official said. "However, given growing concerns about deposit burdens amid recent rises in housing and jeonse and monthly rent prices, we plan to gather feedback from the field and review any necessary supplementary measures."