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Long-term housing deposits in Seoul jump due to new regulations and supply issues, rents also up

Published: 27 Nov. 2025, 16:08

Apartments across Seoul are shown from Mount Namsan in central Seoul on Nov. 24. [YONHAP]

Jeonse (long-term housing rental deposit) prices in Seoul are climbing to record highs amid a worsening imbalance in the rental market, which experts say has been exacerbated by government regulations and dwindling housing supply. Monthly rent prices are also on the rise.

According to real estate information provided by the Seoul Metropolitan Government on Wednesday, the average jeonse contract price for apartments in the capital city as of Tuesday was 636.83 million won ($435,000), up 3.7 percent from November last year and the highest figure recorded since statistics were first compiled in 2011. This figure reflects the average price of all apartment jeonse contracts signed in Seoul during a given period.

Market price data also shows jeonse nearing all-time highs. According to real estate data provider Real Estate R114, the average jeonse price in Seoul last month was 663.78 million won, 96.5 percent of the peak price in April 2022, which was 687.27 million won.

Record-breaking contracts are also becoming more common. On Nov. 5, a 101-square-meter (1,087-square-feet) unit in Gyeongheegung Xi Complex 2 in Hongpa-dong, Jongno District, central Seoul, signed a jeonse contract at 1.6 billion won — a 14.3 percent increase, or 200 million won higher than the previous record set just a month earlier.

In another case, an 84-square-meter unit in Lotte Castle Classya in Gireum-dong, Seongbuk District, central Seoul, was leased at 870 million won last month, up 90 million won from a new contract signed in August.

A person passes by a real estate agency with listings for nearby apartments in Seoul on Nov. 24. [NEWS1]

Analysts say this surge stems from tighter regulations that have reduced jeonse listings. After the entire city of Seoul was designated a land transaction permission zone, so-called “gap investment,” meaning the act of buying a property with a jeonse tenant, was effectively blocked. Under these rules, homebuyers must live in the property for at least two years, limiting the supply of available jeonse units.

Meanwhile, demand has remained steady or even increased as some would-be homebuyers are turning to rentals instead. With tighter lending regulations and heavier taxation, more tenants are choosing to wait things out in the jeonse market.

The recent expiration of contract renewal and rent cap protections, introduced five years ago, has also contributed to the rise. Landlords who had previously been unable to raise jeonse deposits by more than 5 percent are now resetting prices with steep hikes.

“As jeonse prices surge, the gap between new and renewed contracts within the same apartment complex can now exceed 200 million won,” said Ham Young-jin, head of research at Woori Bank.

Monthly rents are also showing signs of strain. An analysis of Ministry of Land, Infrastructure and Transport data showed that in the month after land transaction rules were enforced, particularly from Oct. 20 to Nov. 19, 55.3 percent of new apartment monthly rental contracts in Seoul were priced at 1 million won or more. This is up 2.4 percentage points from the previous month, and 14.2 percentage points higher than a year earlier.

According to the Korea Real Estate Board, the average monthly rent for Seoul apartments in October was 1.46 million won — the highest since data collection began in July 2015. KB Kookmin Bank's monthly housing index also recorded its highest-ever reading this month, with the Seoul apartment rent index reaching 130.2 — breaking the 130 threshold for the first time since December 2015.

Apartments across Seoul are shown from Mount Namsan in central Seoul at night on Nov. 21. [NEWS1]

Analysts point to a growing trend of jeonse shifting to monthly rent, driven by reduced jeonse listings, stricter loan availability and overall supply shortages. A drop in apartment completions in Seoul over the past two to three years has only intensified the strain on both the jeonse and monthly rental markets.

Experts warn of a vicious cycle: Declining jeonse supply drives up deposits, pushing tenants into monthly rentals, which in turn increases demand and raises rent prices.

“With fewer apartment completions expected next year, instability in the rental market is likely to continue,” said Lee Jae-yoon, CEO of real estate platform Ziptoss.

“Typically, rental prices lag behind home prices, so if housing prices slow, rents might stabilize too,” said Park Won-gap, a senior real estate analyst at KB Kookmin Bank. “But if the jeonse shortage continues, instability in both the jeonse and monthly rental markets could persist. We’ll need to monitor the situation closely.”

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY JEONG EUN-HYE [[email protected]]