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Lump-sum deposit listings decrease, monthly rent climbs as housing crisis continues

Published: 31 Jan. 2026, 16:42 Updated: 01 Feb. 2026, 19:04

LEE TAE-HEE
[email protected]

A bird's eye view of apartments in Nowon District, northern Seoul, on Jan. 29 [NEWS1]

“The jeonse market has been replaced by houses with high monthly rent," said a real estate agent in Songpa District, southern Seoul, referring to the lump-sum deposit rental system. "For tenants, it is effectively the opening of a housing hell."

Following tighter loan rules introduced last year and the expansion of land transaction permit zones that require local government approval for certain property sales, jeonse listings in Seoul have rapidly declined, with monthly rentals taking their place.

According to the real estate platform Asil, there were 21,807 jeonse listings for apartments in Seoul as of Tuesday, down 26.6 percent on year.

In Seongbuk District, central Seoul, jeonse listings dropped by more than 87 percent on year, while the Gwanak, Gangdong, Dongdaemun and Eunpyeong districts in Seoul have seen similar shortages.

As it becomes difficult to rent houses through jeonse, tenants are turning to monthly rentals. However, the increased demand is driving monthly rent higher, creating a vicious cycle.

According to the Korea Real Estate Board, Seoul’s apartment monthly rent price index rose to a record high of 103.45 in December 2025.

Analysts also warn that the instability could spill over from the rental market into the home sales market.

According to a survey conducted by The JoongAng Sunday of 31 real estate experts from academia and research institutions between Jan. 19 and 25, 55 percent expect jeonse shortages to push renters into purchasing homes. Another 39 percent predicted a shift toward monthly rentals, while only 6 percent anticipated that people will move to other regions.

Experts say this trend could lead to a so-called triple rise this year, referring to increases in jeonse prices, monthly rent and house prices.

“Not only Seoul, but also Gyeonggi and Incheon areas are seeing a rapid decline in housing supply,” said Ko Jong-wan, the head of the Korea Asset Management Institute. “The demand for houses can be tamed through policies, but demand for jeonse and monthly rentals is much harder to suppress. People struggling with housing costs are likely to move into lower-priced areas of Seoul or purchase homes in the area just outside Seoul.”

Survey results also show that shrinking supply is the key cause of the jeonse crisis.

Of the survey respondents, 40 percent cited a lack of new housing supply as the primary cause of the jeonse shortage.

Another 22 percent pointed to tighter regulations, such as requiring homeowners to occupy their properties for a certain period, while 15 percent believed there is an overall shift from jeonse to monthly rentals.

Price outlooks reflect this pessimism.

A total of 35 percent of respondents expect jeonse prices to rise between 5 and 10 percent this year, while 10 percent expect increases of more than 10 percent.

Rent is also expected to climb.

A total of 45 percent predicted a 3 to 5 percent rise in monthly rent this year, 35 percent expect increases of 5 to 10 percent and 16 percent expect an increase of more than 10 percent.

For tenants, the burden is already heavy.

The average monthly rent for apartments in Seoul has climbed to about 1.47 million won ($1,000), nearly 25 percent of the median income for a four-person household.

In addition, more than 55 percent of rental contracts follow the so-called quasi-monthly rent system, which refers to houses with deposits over 100 million won while also requiring tenants to pay monthly rent.

As prices increase, unconventional rental methods have also emerged. In parts of southern Seoul, there was a landlord who leased a single room inside a house for a deposit of 30 million won and monthly rent of 1.4 million won.

“Rising jeonse prices, which were largely seen in the greater Seoul area, are expected to spread to some other cities this year,” said Yoon Soo-min, a real estate specialist at NH NongHyup Bank.

Few experts believe the situation will improve soon.

In the survey with real estate experts, 65 percent said the end of the jeonse shortage crisis is impossible to predict. Only 19 percent expected the situation to ease within three years.

“With no supply and only regulations left in the market, this pain is bound to continue for a considerable time,” said Kwon Dae-joong, a professor teaching economics and real estate studies at Hansung University.

Attention is now turning to how the jeonse crisis could reshape the housing market. For instance, policymakers may be forced to pivot toward deregulation and measures to stimulate home sales.

For past jeonse crises, the government also increased public rental housing units and provided more jeonse loan support, while also trying to boost house purchases through eased loan-to-value ratios.

“The jeonse shortage is already underway,” said Shin Hyun-kang, the head of Bujilearn, a company providing real estate education programs. “We are seeing people trying to purchase mid-priced apartments and other types of housing."

Experts largely agree that stimulating private rental supply, particularly from owners of multiple homes, is key.

In the real estate expert survey, 33 percent of respondents stated that the most urgent policy measure was revitalizing the private rental housing market. This was followed by expanding private rental housing through public funds at 19 percent and promoting nonapartment housing at 17 percent.

“To reduce housing costs for ordinary households, regulations on private rental operators need to be rationalized and incentives need to be created for long-term jeonse supplies,” said Yoon Hyung-seok, a professor at Kwangwoon University’s Graduate School of Construction Legal Affairs.

He added that the current jeonse crisis is a foreseeable outcome of past policy decisions, calling for a long-term road map to increase private rentals.

However, political signals remain unsettling. Markets are on edge following recent discussions about ending temporary capital gains tax relief for multihome owners selling their house.

“If higher capital gains taxes return, there will be fewer houses in the market, resulting in fewer jeonse units,” said Lee Eun-hyung, a research fellow at the Korea Research Institute for Construction Policy. “Trying to curb prices in select areas at the expense of the broader rental market would amount to solving one problem by creating a larger one."

BY BAE HYUN-JUNG, LEE TAE-HEE [[email protected]]