Seoul is experiencing increased housing instability as apartment prices rise and the supply of jeonse rentals remains low [1].
This trend creates significant pressure on both prospective homebuyers and tenants. As the gap between available housing and demand widens, residents face higher costs of living and diminished options for stable long-term residency in the capital.
Market data indicates that the Seoul apartment sales price index has risen 4.74% [1] based on weekly transactions from the beginning of 2024 through June 2024 [1]. This increase contributes to a broader environment of residential anxiety for those seeking affordable shelter.
Economic experts suggest the current market dynamics are complex. Chun Sora, a professor of economics at Inha University, said that the domestic real estate market can be viewed as two distinct sectors: the sales market and the rental market. She said that it is difficult to view all demand for buying homes as purely speculative [1].
Despite the identified price hikes, the timeline for when the market will stabilize remains uncertain. The combination of rising sales prices and a shortage of jeonse, a uniquely Korean system of lump-sum deposits, continues to squeeze the middle and lower-income populations [1].
Local observers note that the instability is not merely a result of investment trends but a systemic shortage of available units. This scarcity drives up prices across both the ownership and rental sectors, making it harder for residents to secure stable housing without incurring significant debt [1].
“Seoul apartment sales price index has risen 4.74%”
The simultaneous rise in sales prices and the shortage of jeonse rentals indicate a systemic supply-demand imbalance in Seoul. Because the jeonse system often serves as a stepping stone to homeownership, its instability can trap renters in a cycle of rising costs, potentially delaying the transition to ownership and increasing the long-term financial burden on the city's workforce.
