Seoul apartment jeonse prices surge 15% in two years, adding W80m to renewal costs

The average jeonse price for Seoul apartments has risen more than 80 million won ($58,800) over the past two years, meaning tenants whose contracts are expiring now face a significantly heavier deposit burden when renewing or finding a new home.

Monthly rent has climbed even faster than jeonse. The average monthly rent for Seoul apartments rose more than 20 percent over the same period, adding to the housing cost burden on tenants.

According to the Korea Real Estate Board's national housing price trend survey released Sunday, the average jeonse price for Seoul apartments stood at 636.63 million won last month, up 82.68 million won, or 14.9 percent, from 553.95 million won in August 2024.

The median jeonse price also rose 80 million won, or 16.7 percent, over the same period, climbing from 480 million won to 560 million won.

Seoul's jeonse price increase outpaced those in Gyeonggi Province, which rose 11.4 percent, and Incheon, which gained 8.5 percent over the same period.

The average jeonse price of 636.63 million won has now surpassed the previous peak recorded in January 2022, when prices reached 634.24 million won following a rapid run-up after lease law amendments in July 2020. Last month's figure was about 2.38 million won higher than that earlier peak, marking a record high in Korea Real Estate Board data.

Analysts attribute the recent jeonse price surge to a shortage of new apartment move-ins in Seoul and a shrinking supply of jeonse and monthly-rent listings. Tighter lending regulations have also pushed more prospective buyers to stay in the rental market rather than purchase, adding further upward pressure on jeonse prices. When existing tenants renew their contracts amid dwindling supply, the number of listings entering the market can fall further.

Songpa-gu saw the sharpest increase among Seoul districts.

The average jeonse price in Songpa-gu reached 941.37 million won last month, up 24.3 percent from 757.34 million won two years ago.

In won terms, that is an increase of 184.03 million won — meaning a tenant renewing a comparable lease in the district would need, on average, more than 180 million won more than before.

Gangdong-gu also posted a 20.6 percent gain, with the average jeonse price rising 102.93 million won, from 500.82 million won to 603.75 million won.

Seongbuk-gu climbed 84 million won, or 18.7 percent, from 448.63 million won to 532.63 million won, while Yeongdeungpo-gu rose 99.54 million won, or 18.3 percent, from 543.72 million won to 643.26 million won.

In districts where jeonse prices have risen faster than the Seoul average, tenants facing lease renewals are under even greater pressure to secure larger deposits.

Monthly rents rose even more sharply than jeonse prices. The average monthly rent for Seoul apartments with a deposit climbed from 1.32 million won to 1.64 million won last month, a gain of 24.3 percent over two years, outpacing the 14.9 percent rise in jeonse prices.

The average deposit for such monthly-rent contracts edged down 492,000 won, or 0.3 percent, to 195.65 million won last month from 196.14 million won two years earlier.

The trend reflects a shift away from the traditional structure in which higher deposits offset lower monthly payments. Increasingly, landlords are accepting lower deposits while charging higher monthly rents. Tenants who find it harder to secure loans for jeonse deposits are also turning to monthly-rent or hybrid arrangements, driving up demand in that segment.

Monthly rent increases were most pronounced in Gangnam-area districts and neighborhoods along the Han River.

In Songpa-gu, the average monthly rent surged 56.2 percent over two years, rising 848,000 won, even as the average deposit fell 31.63 million won, or 9.7 percent.

The median monthly rent in Songpa-gu jumped 910,000 won, or 69.2 percent, while the median deposit level was little changed.

Seocho-gu saw average monthly rent rise 766,000 won, or 37.5 percent, over the same period. Yeongdeungpo-gu gained 404,000 won, or 35.5 percent; Gangdong-gu rose 372,000 won, or 34.1 percent; and Yongsan-gu climbed 632,000 won, or 28.9 percent.

Dongjak-gu posted a gain of 340,000 won, or 28.4 percent; Seongdong-gu rose 544,000 won, or 27.4 percent; and Gwangjin-gu climbed 432,000 won, or 26.5 percent.

With both jeonse and monthly rents rising simultaneously in Seoul's rental market, tenants are finding their options increasingly limited. Analysts say that if tighter borrowing conditions continue to reduce jeonse demand while supply also shrinks, monthly-rent demand could climb further. The pace of new apartment move-ins and any increase in jeonse and monthly-rent listings are seen as the key variables that will shape the direction of rental prices going forward.