Jeonse rental deposits in Seoul have risen by over five% this year [1], a rate more than five times the increase recorded last year [1].
The surge reflects a critical shortage of rental units and an imbalance of power between landlords and tenants. This trend is significant because rising jeonse prices often act as a catalyst for higher home-sale prices, creating a volatile cycle in the South Korean real estate market.
In Seongdong-gu, the impact is visible in large-scale apartment complexes. One 84-square-meter lease signed last month carried a deposit of 10.95 billion won [1]. In April, a deposit for an apartment of the same size was 9.4 billion won [1]. This represents an increase of approximately 1.55 billion won over just two months [1]. Another large complex in the same district saw a national-standard jeonse deposit reach 13 billion won last month [1].
Real estate professionals describe the current environment as a market without brakes. Kwon Hyo-ju, a real estate agent, said transactions are difficult because there are few available units and prices have risen significantly. Kwon said owners are raising prices and currently hold the advantage.
The crisis is mirrored in statistical data. The jeonse supply index has reached levels seen in early 2021 [1]. That period is regarded as the worst rental crisis in recent history [1].
As the supply of jeonse units remains low, landlords continue to exert strong pricing power. This environment forces renters to compete for a dwindling number of available homes, further accelerating the price climb.
“Jeonse rental deposits in Seoul have risen by over 5% this year”
The rapid ascent of jeonse deposits suggests a systemic instability in Seoul's housing market. Because the jeonse system relies on large lump-sum deposits rather than monthly rent, these price spikes increase the financial burden on tenants and heighten the risk of 'gap investment' speculation. When rental deposits approach the cost of purchasing the property, it often triggers a broader increase in real estate valuations across the city.
